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Panasonic joins firms stepping away from Huawei after US ban
TOKYO, May 23, 2019 (BSS/AFP) – Japan’s Panasonic on Thursday said it would
stop supplying some components to Huawei, joining a growing list of firms
distancing themselves from the Chinese telecoms giant after a US ban over
security concerns.
The announcement came a day after four major Japanese and British mobile
carriers said they would delay releasing new Huawei handsets.
“We’ve stopped all business transactions with Huawei and its 68 group
companies… that are subject to the US government ban,” Panasonic spokesman
Joe Flynn told AFP.
“Yesterday an internal instruction to fully enforce that rule was issued,”
he added.
Flynn said Panasonic’s business with Huawei includes the supply of
“electronic parts,” but declined to provide further details.
Washington’s restrictions affect products made fully or partially in the
United States, where Panasonic manufactures some of the components it
supplies to Huawei, the Japanese firm said.
A Panasonic official declined to comment on what business the Japanese firm
would continue to do with Huawei, though reports said the suspension would
have a limited impact.
Last week, US President Donald Trump declared a national emergency to bar
US companies from using foreign telecoms equipment deemed a security risk.
The move appeared aimed at Huawei, though the White House said no
particular company or country was targeted.
It has prompted a parade of firms to step back from dealings with Huawei,
including US internet giant Google, whose Android operating system powers
most of the world’s smartphones.
And on Wednesday mobile carriers in Japan and Britain said they were
delaying releases of Huawei handsets.
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– Temporary suspensions –
Telecoms giant EE, owned by BT, was due to bring Huawei’s first 5G phone,
the Huawei Mate 20X, to Britain, but the Chinese giant’s involvement in the
country’s telecoms sector has become politically controversial.
EE chief executive Marc Allera said the company had “paused” the launch of
Huawei’s 5G phones “until we get the information and confidence and the long-
term security that our customers… are going to be supported”.
The group also said it would phase out the use of Huawei equipment in the
most sensitive “core” elements of its network infrastructure.
Vodafone soon followed suit, announcing a “temporary” suspension of pre-
orders for Huawei handsets, “while uncertainty exists”.
The BBC also reported that British firm ARM, which designs processors used
in most mobile devices and makes products that contain “US-origin
technology,” is set to cut ties with Huawei
ARM staff were told to suspend “all active contracts, support entitlements,
and any pending engagements” with Huawei, according to internal documents
seen by the BBC.
Huawei said Wednesday that it recognised “the pressure” placed on its
suppliers, and that it was “confident this regrettable situation can be
resolved.”
– ‘A sense of safety’ –
In Japan, KDDI and SoftBank Corp, the country’s number-two and number-three
carriers respectively, said they too were delaying the release of Huawei
handsets to assess the impact of the US ban.
“We are currently trying to confirm if our customers will be able to use
the equipment with a sense of safety”, SoftBank spokesman Hiroyuki Mizukami
told AFP.
And the country’s biggest carrier, NTT Docomo, said it was suspending pre-
orders for a new Huawei handset, but stopped short of halting the release.
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Trump’s order effectively bans US companies from selling Huawei and
affiliates the critical components that have helped it grow into the world’s
largest supplier of telecom networking equipment and second-biggest
smartphone maker.
US officials this week, however, issued a 90-day stay on the ban, saying
breathing space is needed to avoid huge disruption.
The US Commerce Department has also announced an effective ban on US
companies selling or transferring US technology to Huawei.
Analysts say the restrictions could be seriously damaging for the Chinese
firm, with the pullback by Google and ARM likely to be “particularly
troubling” for the telecoms giant.
“How the US ban on business with Huawei will impact the Chinese firm’s
performance is at this point unclear, but what is clear to me is that its
sales will be negatively affected,” said Hiroyuki Kubota, an independent
financial analyst.
Washington has long suspected deep links between Huawei and the Chinese
military, and its moves against the company come amid the churning trade
dispute between the world’s top two economies.
The issue has also been the source of heated controversy in Britain ever
since a leak from the country’s National Security Council last month
suggested the government was planning a limited role for Huawei in its 5G
network.
US Secretary of State Mike Pompeo warned Britain during a visit to London
that it risked undermining the historic allies’ intelligence sharing.
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