A most interesting press release came out from Huawei Technologies, courtesy of SCMP, today: “We will eventually retake our throne in the smartphone market, while continuing to improve our chip-making capabilities.”
This is quite a change of tone from the company, which has recently been emphasizing that it is in “survival mode”. It is likely to have been spurred by significant government support. Indeed, as mentioned last week, it is highly likely that Huawei is at the center of the Guangdong government’s new Five-Year Plan for semiconductors. It is the region’s only aspiring world-class tech company that has a strong foundation in both hardware and software, and the organisational capability to even begin to know how to grow an advanced semiconductor industry.
It will be interesting to see how the US government responds. Republican Senator Marco Rubio, who appears to be positioning himself for a presidential campaign with a tough stance on China, is already on the warpath against Tik Tok after the Chinese government’s recent acquisition of a stake and board seat. But more importantly, the Commerce Department is currently reviewing its Entity List, which is what started Huawei’s downfall back in May 2019. Will it take a closer look at the Guangdong Five-Year Plan and consider whether it needs to examine Huawei’s supply chain more carefully? It should become clear in the coming months.