Huawei troubles poised to land on US industry

Huawei is in deep trouble. It might not quite be ZTE levels of trouble, but the winds are swirling.

I’ve written about Huawei’s security and telecommunication equipment problems before. Add in trade wars and criminal allegations, and you’re almost caught up.

Previously I’ve tried to get to the bottom of security issues with Huawei, but the exact secrets have never quite been revealed. The Five Eyes nations firmly believe Huawei is more or less a proxy for the Chinese state, but the public hasn’t seen verifiable proof.

Things are changing. The arrest of CFO Meng Wanzhou, daughter of founder Ren Zhengfei, in Canada occurred on Dec. 1. The public wasn’t aware of her detention until Friday, December 7th.

The arrest of Meng Wanzhou is cataclysmic. You may have seen the headlines about Beijing’s fury, threats to Canada, and furor, but it hasn’t taken legal action, as you might have well expected.

The situation currently surrounding Huawei has major implications for worldwide 5G rollout.

Here’s how the South China Morning Post described the aftermath of the arrest:

“The shocked tone rings false. If China’s ambassador to Canada was really so sure Meng’s arrest was wrong, he could have filed a writ of habeas corpus to have her brought immediately before a court to determine the lawfulness of her detention. He did not.”

Meng was eventually freed on a $7.5m bail, and must wear an ankle bracelet along with paying for 24/7 security to ensure she does not attempt to flee Canada, as an extradition hearing is set up. Meng was also forced to surrender all passports and travel documents.

The U.S. Justice Department is seeking to pursue investigations that Huawei violated U.S. sanctions on Iran. While non-U.S. companies are free to deal with Iran — Samsung sells smartphones to Iranians — they can’t sell U.S. technologies like Intel or Qualcomm chipsets or modems. A similar breach of sanctions saw ZTE barred from using U.S. companies’ technology — something later watered down to fines after reported intervention from the White House.

Any such ban would be devastating for Huawei’s business. Of Huawei’s reported 92 core suppliers, 33 are U.S. corporations, including chip makers such as Intel, Qualcomm, Broadcom, and Micron.

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