Huawei was recently put on a blacklist by the U.S. government, effectively curbing all businesses between the Chinese tech giant and any American corporation. The ban will hugely affect Huawei’s business as one would expect. But as it turns out, it will also be affecting a range of American corporations who have business tied to the Chinese company.
Intel, AMD and Nvidea are among the companies that look to lose money as a result of this ban. In a new report by Goldman Sachs, a whole range of companies could be losing revenue due to the ban. The most affected of the companies include the likes of Broadcom, Qualcomm and Micron, among Intel and AMD. Intel, for instance, could lose as much as $85 million due to ban. AMD could lose $39 million.
Huawei had supposedly expected this ban to happen sooner or later. So there are news that they have been stockpiling components before the ban. The company has been under a lot of fire in the last year. And it has been one of the major cross-fire victims of the ongoing trade war between the U.S. and China. But it turns out a lot of American corporations will be taking a hit as well.
Huawei’s American suppliers
The following chart shows a list of Huawei’s global suppliers. The U.S. is the company’s second largest supplier in the world (after China).
As it turns out, Huawei does business with a lot of U.S. companies. The following charts show a list of U.S. corporations that supply components to Huawei. It also shows the loses these companies could face as a result of having to terminate business with the Chinese tech giant.
Why Huawei Was Banned In The U.S.
Huawei has been under a lot of fire in the past year. The U.S. government has accused the company of spying for the Chinese government. While Huawei has been claiming that they have done nothing of the sort, the Trump’s government still thinks they are untrustworthy.
To add to all this, the U.S. and China are in a full-blown trade war right now and it looks as though Huawei has been caught in the cross-fire. The U.S has raised tariffs on all Chinese imports up to 25%. China, as a retaliation, withdrew from all commitments to force technology IP transfers on American companies. And as a result of this ongoing conflict, many companies have already moved as much as half of all productions out of China.
Trump’s Government recently signed an executive order banning all American firms from doing business from companies that could be spying for China. Huawei wasn’t picked on in particular, but the company is understood by many to be one of the prime targets. This is the reason why many companies are trying to distance themselves from the Chinese tech giant. Google, for instance, recently announced that it would be suspending Huawei’s android license.
The Department of Commerce has reportedly granted Huawei a temporary license (lasting until Aug 19). The company will be allowed to send software updates to existing phones until the license expires.