Huawei to spend $40 billion on supplies from Europe to offset US ban
Monday, 04 November 2019
Chinese telecoms giant Huawei plans to spend up to 40 billion U.S. dollars on supplies in Europe in the next five years to offset its lost access to American products, the Group told the French news agency, AFP, on Monday.
Huawei’s decision is a direct result of the decision by the White House to ban U.S. companies from selling technology to the group, which it suspects of potential espionage on Beijing’s behalf.
It is not without consequences for groups like Qualcomm, Intel, Micron or Google, since Huawei usually spends over 10 billion dollars a year on semi-conductors, spare parts and services for its smart phones and network equipment.
Now that the tech giant can no longer buy in the U.S., it is increasing its procurement in China, Japan and Europe to make sure its production chains remain unbroken, Ernest Lin Zhang, president of enterprise activities for Western Europe at Huawei, explained in an interview.
The U.S. ban has little impact on 5G-equipment supplies, in which the group says it “no longer has any American product”.
Huawei further disclosed that it wishes to work on setting up a sovereign European cloud, which would enable the storage and processing of data online without going through the U.S. technology giants.
The group explained that it is supplying equipment to operators providing this type of service, such as France’s Orange group and Telefonica in Spain.
“Outside of Europe, we supply our own service, but on the continent, our strategy is based on joint development with our partners,” Lin Zhang said. “We provide them with support to develop their own cloud services.”
“If clients go through these operators, they are choosing a European operator, the data is stocked in Europe,” he stressed. “We have absolutely no access to it. It is managed totally by our partners.”
For Lin Zhang, this is a response to concerns raised by governments and the European Commission when the “market is largely controlled by American businesses.”
Huawei announced in mid-October that it had supplied over 400,000 5-G antennas worldwide to about 60 clients, more than half of them in Europe.
Despite the trade tensions between China and the United States, the group saw its turnover increase by over 24% in the first nine months of this year, reaching a total of 610.8 billion yuan, equivalent to 77.9 billion euros.