Alphabet Inc.’s (NASDAQ:GOOGL) Google has indicated that it will stop supplying Huawei with hardware products and software in compliance to White House’s order for companies to stop doing business with the Chinese giant.
US tech companies stop supplying Huawei
This comes at the back of various tech companies like Qualcomm Inc. (NASDAQ:QCOM), Intel Corp. (NASDAQ:INTC) Broadcom Inc. (NASDAQ:AVGO) and Xilinx Inc. (NASDAQ:XLNX) indicating that for now they are stopping supply to Huawei.
Google supplies Huawei with the software required to power its devices and if the restriction continues Huawei’s loss will be abroad. In china there is limited access to Google services so the impact will be minimal but the greatest effect will be felt in Europe where the company is a leading phone seller.
Last week the President ordered for Huawei to be blacklisted from the US stating that the Huawei had been helping China in doing surveillance. The president threatened to limit supply of the technology that Huawei require from the US to produce their products.
US businesses to be impacted by the move
The move is likely to negatively affect chip businesses like that of Micron Technology Inc. (NASDAQ: MU)and it could derail the anticipated roll out of 5G network across the globe as well as in China. This is likely to hurt some of the US chipmakers who are increasingly reliant of China for growth as the second largest economy in the globe.
The aggressive stance taken by White House towards Huawei is likely to speed up Chinese innovation of gadgets and phones that use software and chips that are locally made.
Canalys analyst Nicole Peng said that this comprehensive move by Trump was anticipated by the Chinese but it came earlier surprising most people who didn’t take it to be real.
However it is still uncertain whether the move could essentially isolate Huawei from the rest of the world as president Trump’s administration has been trying to influence other countries to turn away from Huawei products.
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