Chinese telecommunications giant, following two executive orders President Donald Trump signed last week. Those orders ban U.S. purchase of technology from companies deemed a threat to national security and block Huawei from buying American products without U.S. government approval.
That means Huawei would be cut off from crucial hardware such as chips, processors and modems from Qualcomm, Intel and other American companies.
Unless the ban is dropped as part of ongoing U.S.-China trade talks, Huawei could end up leading a "decoupling" of the American and Chinese tech worlds that encompasses everything from supply chains to the end user's choice of apps.
Huawei founder and CEO Ren Zhengfei scoffed at the orders on Saturday, telling Japanese media in Shenzhen, China, that the company would be "fine" without U.S. components.
"We have already been preparing for this," Ren said.
Huawei reportedly has a stockpile of enough chips to keep the company going for several months. Its subsidiary HiSilicon also designs and supplies chips for Huawei smartphones, though industry experts say their chips are not on par with American ones.
HiSilicon President He Tingbo wrote a letter to her staff on Friday saying the firm has been developing backup chips for years in case an "extreme scenario" like this one unfolded, and would help enable Huawei to be self-sufficient.
Huawei is not a major customer for San Diego-based Qualcomm, which supplies 50% of the global market for smartphone processors. Analysts believe the smartphone chips that Qualcomm sells to Huawei are limited to a few models sold outside China. Huawei does license Qualcomm's cellular patents, but the two companies are in a dispute over how much is owed in patent fees. Investors worry that Huawei could stop making payments.
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