Cisco will benefit from the US attack against Huawei

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The Commerce Department's announcement last week that it would force all US companies doing business with Huawei and its affiliates to obtain a special license was a dramatic move to get China into the trade war. But chances are it will not be.

Its systems, through close integration with US semiconductor companies, are more advanced than their competitors Nokia and Eriksson. In addition, they are cheaper.

Global telecommunications companies, still in search of competitive advantages, are preparing to buy Huawei's switches and network components.

And the stakes are high. Very often, investors assume that the fifth generation of wireless services is for smartphones and that download speeds are 10 to 1000 times faster than 4G.

It's short-sighted.

5G is about the future of connected objects. & Nbsp; Large capacity networks with lower latency (the time it takes for the action to fire) will open up all kinds of new technologies.

Connected and autonomous cars, remote robotic surgery, smart cities and factories are only the beginning of what is possible.

The company that wins the 5G race will reap untold wealth.

The Trump administration wants to make sure that Huawei is not even in the running.

The Commerce Department's directive effectively prohibits the sale of semiconductors to US companies. This Huawei knee in the worst way possible.

There is no easy way for the company to create 5G products without this intellectual property.

Huawei depends on & nbsp;Qualcomm to make his smartphones. Building a 5G infrastructure will be impossible without the FGPA's intellectual property of the Field Gate Programmable Bay that & nbsp;Xilinx and & nbsp;Intel Are growing.

The FPGA is ideal for 5G because it allows to program the integrated circuit after its manufacture. Software-defined hardware is essential for the construction of base stations and flexible towers.

The Commerce Department said the ban was a national security issue. & Nbsp; He points out long-standing concerns Huawei is simply a front for the Chinese government. To make society zero for 5G is therefore to integrate a spy network.

And there is a precedent of concern …

The Chinese government pledged in 2006 to build the headquarters of the African Union in Addis Ababa, Ethiopia. The $ 200 million project, completed in 2012, included a computer and a state-of-the-art network system provided by Huawei.

The World Africa& nbsp; In 2018, it was reported that, every evening, the servers of the African Union had begun to transfer data to Shanghai, at a distance of 5,000 km. The breach was discovered by chance, according to a BBC press release & nbsp;story, when a scientist working late one night discovered an unusual server activity.

Huawei has not asserted any wrongdoing. However, the company has close ties with the Chinese government. Ren Zhengfei, his 74-year-old founder, began his career as a military technologist in the People's Liberation Army.

Ren has become a symbol of the Chinese entrepreneurial spirit. He started Huawei in 1987 with an investment of only $ 5,000. The company started modestly. As a reseller of telecommunication switches. First employees & nbsp;worked, eaten and lived& nbsp; in a small office in Hong Kong. Today, Shenzhen 's company is the world' s largest telecommunications company, with a business turnover of 108.5 billion dollars.

According to the company & nbsp;website, the company employs 180,000 people in 170 countries and has built 1,500 telecom networks, which connect one-third of the world's population.

Now, Washington wants to make it the first victim of the Sino-US trade war.

This is a major escalation. Attempts to kill Huawei will not please Chinese political leaders. They have made the transition from the low-cost electronics supplier country to a technology leader in the fields of artificial intelligence, robotics, autonomous cars and aerospace, an essential element of long-term plans.

In the technological space, there is a lot of gloom. Huawei is a major customer of American technology companies.

For example, & nbsp;Quartz& nbsp;reported& nbsp; in 2016, China imported semiconductors worth $ 160 billion, making tiny pieces of silicon even more valuable to its economy than oil.

A company that seems to have anticipated the escalation of the trade war is & nbsp;Cisco Systems. It is also a logical beneficiary of a weaker Huawei.

Executives & nbsp;told& nbsp;CNBC& nbsp; they mitigated the effects of the 25% tariff shift on many Chinese products by transferring part of the supply chain to other countries.

The global manufacturer of telecommunication equipment is moving to network services such as security. The company 's business figure for the 2018 fiscal year stands at $ 49.3 billion, up 2.7% from one year to the next.

Equities are trading at 16.5 times futures, for a market capitalization of $ 251 billion.

Longer term investors should consider a decline to $ 50.

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The Commerce Department's announcement last week that all US firms doing business with Huawei and its affiliates should get a special license is a dramatic move designed to get China into the war commercial. But chances are it will not be.

Its systems, through close integration with US semiconductor companies, are more advanced than their competitors Nokia and Eriksson. In addition, they are cheaper.

Global telecommunications companies, still in search of competitive advantages, are preparing to buy Huawei's switches and network components.

And the stakes are high. Very often, investors assume that the fifth generation of wireless services is for smartphones and that download speeds are 10 to 1000 times faster than 4G.

It's short-sighted.

5G is about the future of connected objects. Larger capacity networks with lower latency – the time it takes between launching an action and running it – will open up all kinds of new technologies.

Connected and autonomous cars, remote robotic surgery, smart cities and factories are only the beginning of what is possible.

The company that wins the 5G race will reap untold wealth.

The Trump administration wants to make sure that Huawei is not even in the running.

The Commerce Department's directive effectively prohibits the sale of semiconductors to US companies. This Huawei knee in the worst way possible.

There is no easy way for the company to create 5G products without this intellectual property.

Huawei depends on Qualcomm to make his smartphones. Build a 5G infrastructure will be impossible without the programmable network FGPA intellectual property Xilinx and Intel Are growing.

The FPGA is ideal for 5G because it allows to program the integrated circuit after its manufacture. Software-defined hardware is essential for the construction of base stations and flexible towers.

The Commerce Department says the ban is a national security issue. Huawei is only a front for the Chinese government. To make society zero for 5G is therefore to integrate a spy network.

And there is a precedent of concern …

The Chinese government pledged in 2006 to build the headquarters of the African Union in Addis Ababa, Ethiopia. The $ 200 million project, completed in 2012, included a computer and a state-of-the-art network system provided by Huawei.

The World Africa reported in 2018 that every evening, the servers of the African Union had begun to transfer data to Shanghai, at a distance of 5,000 km. According to a BBC story, the breach was discovered by chance when a scientist working late at night discovered an unusual server activity.

Huawei has not asserted any wrongdoing. However, the company has close ties with the Chinese government. Ren Zhengfei, his 74-year-old founder, began his career as a military technologist in the People's Liberation Army.

Ren has become a symbol of the Chinese entrepreneurial spirit. He started Huawei in 1987 with an investment of only $ 5,000. The company started modestly. As a reseller of telecommunication switches. The first employees worked, ate and lived in a small office in Hong Kong. Today, Shenzhen 's company is the world' s largest telecommunications company, with a business turnover of 108.5 billion dollars.

According to the company's website, the company employs 180,000 people in 170 countries and has built 1,500 telecom networks, which connect one-third of the world's population.

Now, Washington wants to make it the first victim of the Sino-US trade war.

This is a major escalation. Attempts to kill Huawei will not please Chinese political leaders. They have made the transition from the low-cost electronics supplier country to a technology leader in the fields of artificial intelligence, robotics, autonomous cars and aerospace, an essential element of long-term plans.

In the technological space, there is a lot of gloom. Huawei is a major customer of American technology companies.

For example, Quartz reported in 2016 that China had imported semiconductors worth $ 160 billion, making tiny pieces of silicon even more valuable to its economy than oil.

A company that seems to have anticipated the escalation of the trade war is Cisco Systems. It is also a logical beneficiary of a weaker Huawei.

The executives said CNBC they mitigated the effects of switching to 25% tariffs on many Chinese products by transferring part of the supply chain to other countries.

The global manufacturer of telecommunication equipment is moving to network services such as security. The company 's business figure for the 2018 fiscal year stands at $ 49.3 billion, up 2.7% from one year to the next.

Equities are trading at 16.5 times futures, for a market capitalization of $ 251 billion.

Longer term investors should consider a decline to $ 50.