Tuesday, June 18, 2024

A new “Huawei” plan to circumvent US sanctions. It will work?


Huawei, whose smartphone business has been affected by US sanctions, plans to license its phone designs to third parties as a way to gain access to critical components.

The Chinese tech giant is considering licensing its designs to a unit of state-owned China Post and Communications Equipment Corporation, or PTAC, which then seeks to buy the parts banned from the Trump-era blacklist.

The unit, known as Xnova, sells Huawei-branded Nova phones through its e-commerce site. The association stipulates that Xnova will offer its own branded hardware based on the larger company’s designs.

Chinese telecommunications equipment company TD Tech also sells some Huawei-designed phones under its own brand. Associations are subject to change as negotiations are still ongoing.

A chance to save

The move may be Huawei’s best chance to save its smartphone business after US sanctions cut off its access to major chipmaker Taiwan Semiconductor Maker, Google’s Android apps, and Qualcomm’s modems.

Since Huawei was first criticized by the Trump administration, the shrinking consumer business has seen sales drop for four consecutive quarters.

And the company sold Its sub-brand is HONOR. It joined a consortium led by a state company about a year ago, freeing the company from US sanctions.

“Honor can now buy components from vendors like Qualcomm,” said CEO George Zhao.

This success encouraged the Huawei subsidiary to seek new alliances to maintain its consumer activity.

The company’s engineers began redesigning the circuitry of some of the high-profile smartphones that previously ran on the company’s in-house HiSilicon chips, so that they can be adapted to Qualcomm or MediaTek processors.

Huawei expects the partnerships to increase shipments of smartphones, including in-house models and those sold by partners, to more than 30 million units next year.

fight for income

PTAC is a unit of China General Technology Group, which is a major manufacturer and importer of machinery controlled directly by the central government.

TD Tech was established in 2005 with assets from companies such as Siemens AG. This despite the fact that the German multinational said that it is no longer a shareholder in the project.

Huawei has been struggling to find new cash income, to make up for the shortfall left by its rapidly shrinking consumer electronics business, and generated 483 billion yuan ($ 75.6 billion) in revenue last year, equivalent to the IBM’s annual sales, according to its publication. The Arab portal for technical news.

The latest deals are unlikely to generate significant profits for the Chinese giant. But these partnerships may be necessary to help the company maintain its smartphone development capabilities.

The Biden administration has shown no signs of easing sanctions on the company, although CFO Meng Wanzhou recently struck a deal that exempted her from a U.S. extradition request that left her under house arrest in Canada for two years.

Executives, including founder Ren Zhengfei, Meng’s father, vowed to continue making smartphones.

Ebenezer Robbins
Ebenezer Robbins
Introvert. Beer guru. Communicator. Travel fanatic. Web advocate. Certified alcohol geek. Tv buff. Subtly charming internet aficionado.

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