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US chip makers lobby silently to lighten Huawei's ban: sources



SAN FRANCISCO / WASHINGTON (Reuters) – Huawei's US chipmakers, including Qualcomm and Intel, are quietly pushing the US government to lift its ban on sales to China's tech giant, even as Huawei avoids typical government lobbying. people familiar with the situation even said.

FILE PHOTO: The Huawei logo is visible in a shopping mall in Shanghai, China, June 3, 2019. REUTERS / Aly Song / File Photo

Leaders of leading US chip makers, Intel and Xilinx Inc., attended a meeting with the Commerce Department in late May to discuss a response to Huawei's blacklisting, said a nobody.

The ban bars US suppliers from selling to Huawei, the world's largest manufacturer of telecommunications equipment, without special permission, because of what the government has described as national security concerns.

Qualcomm also lobbied the Commerce Department about it, said four people.

The chip makers claim that Huawei units selling products such as smartphones and computer servers use commonly available components and will likely not have the same security issues as the 5G network hardware of the Chinese technology company, according to three people.

"It is not enough to help Huawei. It's about preventing damage to US companies, "said one of the people.

Of the $ 70 billion spent by Huawei in 2018 on component purchases, approximately $ 11 billion has been allocated to US companies, including Qualcomm, Intel, and Micron Technology Inc.

Qualcomm, for example, wants to be able to continue sending chips to Huawei for common devices such as phones and smart watches, said a person familiar with the company's situation.

The Semiconductor Industry Association (SIA), a professional group, has acknowledged having organized consultations with the US government on behalf of companies to help them comply and inform those responsible for the impact of the company. 39, prohibition on companies.

"For technologies that do not concern national security, it seems that they should not enter the field of control. And we passed that perspective on to the government, "said Jimmy Goodrich, vice president of global politics at SIA.

The ban came shortly after the breakup of negotiations to end the dispute that had lasted for months between China and the United States, under the impulse of American espionage allegations of Chinese companies. , intellectual property theft and forced technology transfer.

Google, which sells hardware, software and technical services to Huawei, also advocated continuing to sell to the company, Huawei chairman Liang Hua told reporters in China earlier this month.

The online research company, a unit of Alphabet Inc., said in a statement that she was working with Commerce to ensure its compliance with the new rules.

A representative of the Commerce Department said the agency "regularly responded to requests from companies regarding the scope of regulatory requirements," adding that the conversations do not influence the actions in the implementation of the law.

Intel, Xilinx and Qualcomm declined to comment. Huawei has not responded to a request for comment.

In an interview in Mexico, Andrew Williamson, Huawei's vice president of public affairs, said the company had not asked anyone to lobby on his behalf.

"They do it by will, because for many of them, Huawei is one of their major customers," he said, adding that chip makers knew that cutting Huawei could have "catastrophic" consequences for them.

Chinese observers say that US suppliers are essentially trying to thread needles – they do not want to be seen as helping a so-called spy, thief and punisher, but fear losing a good customer and encouraging him to refuel elsewhere.

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Huawei, which is also one of the major smartphone manufacturers, has only done very little traditional lobbying in Washington, but has considered sending a letter to the Commerce Department, said two people close to Huawei's thinking.

"We simply have no channel of communication," Liang told reporters earlier this month.

A month after being blacklisted, Huawei did not talk to the US government about the case, two people said.

Huawei had already reduced its lobbying activities before the ban. Last year, five employees of his Washington office, including his vice-president of external affairs, were fired and lobbying expenses reduced, Reuters reported.

However, Huawei has waged a vigorous legal battle and launched a public relations campaign to defend himself against the US government's allegations. He published a one-page ad in major US newspapers in February following a series of talks with Huawei's chief executive, Ren Zhengfei, aimed at easing his dark image in the West .

Huawei's response underscores its diminishing influence with the Trump government, which has launched a global campaign against the company, analysts said.

"Huawei does not trust what they should do next," said Jim Lewis, an expert in cyber computing at the Washington Center for Strategic and International Studies. "He's really badly placed in the US No one wants to do Huawei a favor."

Nevertheless, the ban has had real repercussions.

Broadcom, which has not exerted pressure on the Commerce Department, has sent a shock wave to the global chip manufacturing industry anticipating that trade tensions between the US and China and the ban Huawei would reduce its sales by $ 2 billion this year.

The Ministry of Commerce made a concession just days after the ban, announcing May 20 that it would offer a temporary general license allowing Huawei to buy goods in the United States so that it could be used. 39 to help existing customers maintain the reliability of networks and equipment.

Report by Alexandra Alper in Washington and Stephen Nellis in San Francisco; Diane Bartz in Washington and Karen Freifeld in New York made additional reports; Edited by Chris Sanders and Leslie Adler

Our standards:The principles of Thomson Reuters Trust.

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