Huawei Founder Says No Sale
Huawei (pvt) founder and CEO Ren Zhengfei indicated during an interview that while Huawei might sell some of its 5G technology, it would sell its mobile phone business, regardless of the pressure that has been placed on the company by the US government. In the interview he stated that ‘terminals’ are the company’s stock and trade, meaning any device that connects people and things together, with mobile phones only one part of that business, and while he also indicated that Huawei will not expand its business areas, using the ‘terminal’ definition allows the company to expand into different end markets.
While there has been speculation that Huawei would sell its entire mobile phone business, especially after selling the Honor brand recently, this is basically the same message that the company has been promoting since the conflicts with the US began. That said, as the US restriction grew more stringent and the effects became more pronounced, it became more difficult for Huawei to secure a number of key semiconductor components. When asked about that situation Zengfei stated that they would not give up on globalization, assumedly a reference to his view that semiconductors, in general, could be supplied by a variety of sources, including those in China, where Huawei owns HiSilicon (pvt), a fabless semiconductor supplier. His feeling was that even with the sanctions, global customers will come to China to buy semiconductors in the future.
While an optimistic view, we expect that some of that general semiconductor positivity is based on the hope that during the next four years the US will relax some of the restrictions placed on Huawei by the previous administration. Few thought that China would be able to dominate the LED or display industries in the relatively short amount of time it took them, and while semiconductors are based on far more complex processes, China is dogged in its pursuit of semiconductor competency. The Chinese government, more at the provincial and city level, seems quite willing to finance such projects, and while some will wind up as unfulfilled reams, China always seems to be the dog with the hold on one’s trouser leg, with no way of prying it off with losing some of the material. We are not as sure as Mr. Zhegfei that such will happen soon, but we do expect it will happen. JOHO.
While there has been speculation that Huawei would sell its entire mobile phone business, especially after selling the Honor brand recently, this is basically the same message that the company has been promoting since the conflicts with the US began. That said, as the US restriction grew more stringent and the effects became more pronounced, it became more difficult for Huawei to secure a number of key semiconductor components. When asked about that situation Zengfei stated that they would not give up on globalization, assumedly a reference to his view that semiconductors, in general, could be supplied by a variety of sources, including those in China, where Huawei owns HiSilicon (pvt), a fabless semiconductor supplier. His feeling was that even with the sanctions, global customers will come to China to buy semiconductors in the future.
While an optimistic view, we expect that some of that general semiconductor positivity is based on the hope that during the next four years the US will relax some of the restrictions placed on Huawei by the previous administration. Few thought that China would be able to dominate the LED or display industries in the relatively short amount of time it took them, and while semiconductors are based on far more complex processes, China is dogged in its pursuit of semiconductor competency. The Chinese government, more at the provincial and city level, seems quite willing to finance such projects, and while some will wind up as unfulfilled reams, China always seems to be the dog with the hold on one’s trouser leg, with no way of prying it off with losing some of the material. We are not as sure as Mr. Zhegfei that such will happen soon, but we do expect it will happen. JOHO.
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