Why there? Huawei is a son of Shenzhen. We can understand why it would build a new campus in Dongguan’s Songshan Lake, as that is literally just up the road from its headquarters in Shenzhen’s Longgang district. But Shanghai is on the eastern seaboard, part of the Yangtze River Delta and is Shenzhen’s biggest competitor, er, comrade.Continue reading Huawei commits Kunpeng to home base
Kunpeng, the new ARM-based server chips being developed by Huawei Technologies, is getting a RMB3 billion ($436 million) capital injection over the next five years. The aim is to build an entire “computing ecosystem” for the new microchips.
Xu Zhijun, Huawei’s rotating chairman, said the investment will be used to bolster the company’s IT infrastructure related to Kunpeng and encourage the development of applications based on the processors. An “online community” is being established to offer developers tools, open-source operating systems, and access to related projects.Continue reading Huawei to invest RMB3b in new chips ‘ecosystem’
Gree Electric boss Dong Mingzhu has clearly never seen a challenge she didn’t relish. Despite doubts about her plans to self-develop microchips for the Zhuhai-based home-appliance giant, she is pushing ahead with a RMB50 billion (US$7.3 billion) investment project over the next three years.
The company told Caixin Global it has already started using self-developed chips in some of its air conditioners, and it plans to have them installed in all of them by the end of the year. This is less of a gamble and more of a prudent diversification strategy than it might at first appear. Gree is currently spending RMB4 billion a year on microchip purchases. Developing its own chips is clearly a response to the U.S. attack on ZTE and Huawei.
Investors in the Shenzhen-listed company (SHE: 000651) appear to be of two minds about Gree’s plan, bouncing the stock up and down over the past month. However, since the start of the year, it has made a robust 57% return. Read more.
Day 5 of the Huawei Technologies blacklist drama brings fresh speculation about what will happen to the company. While much focus has been on the loss of Google’s software, which includes its Android OS (not as serious as it sounds) and the Play Store (meaningless), pundits seem to still have no deeper insight into what comes next. Which is hardly surprising.
There is plenty of worrying news to counterbalance the Jedi-like aura emanating from the company’s Shenzhen HQ. It includes an interesting “exclusive” on SCMP today: Huawei is checking with its non-US suppliers to see if they will be affected by the blacklisting, too, as they may be using US products in the components that they, in turn, supply to Huawei.
Far more concerning is the piece published on SupChina, by the Eurasia Group’s Paul Triolo and Douglas Fuller of Hong Kong University, who write that things are worse for Huawei than it appears. Making their own microchips is one thing, they say. But the equipment to make the chips? In the duo’s own words:
“Focusing on the actual chips may be a mere sideshow. The tools needed to design chips, called electronic design automation (EDA) tools, are dominated by a small oligopoly of three firms: Cadence, Synopsys, and Siemens’ Mentor Graphics. Without these tools, it is basically impossible to design chips. Furthermore, given that these EDA tools draw upon repositories of decades of chemistry and material science knowledge, it is virtually impossible for new EDA entrants or existing small tool vendors to provide the quality of tools necessary for complex chip design. Cadence and Synopsys have already announced their plans to stop servicing Huawei and its affiliates. The U.S. government, in line with its laws on export controls, will likely argue that Mentor Graphics uses significant U.S. technology in its products so that it, too, falls under U.S. jurisdiction. Cutting off Huawei, its affiliates, and, potentially, others that attempt to supply Huawei with chips from access to these EDA tools would sound a death knell for the company.”
“We could be moving towards a worst-case scenario for Huawei,” Triolo and Douglas continue, listing the ways in which “the ripple effects of a complete ban on Huawei access to US tech will be huge.”
Gulp. Read more here.