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Huawei now has as many as 10,000 of its approximately 180,000 employees, chiefly developers, working around the clock across three different shifts in a bid to completely eliminate all reliance on American partnerships, based on recent reports. The information comes from several sources said to hail from within the company, who claim that some workers haven’t been able to leave their offices in Shanghai, Shenzhen, and Xi’an for several days.
The efforts primarily center around the development of software and circuitry, with some workers specifically pointing to development in base-station antennas previously built for Huawei’s networking business by US-based Rogers Corp. With networking representing the bulk of Huawei’s business, the efforts reportedly also encompass adjustments to the entire design of 4G base stations.
Employees filling roles ranging from janitors to drivers have been placed on alert as well.
Not surprising
The activity currently reported to be surrounding Huawei is not entirely unexpected as it’s the culmination of ongoing tension between itself and Western governments that’s been building for several years.
Huawei may currently the world’s top supplier in mobile networking equipment and is the second-largest mobile device seller globally, despite not having sales in the US. But it’s effectively now caught in the middle of a trade war between the US and China.
Amid concerns and allegations of executive misconduct and fears that the company may be spying for the Chinese government, the company has been blacklisted by the US, forcing companies it has relied on for years to abandon it. That includes some entities from outside of the US due to close ties across the industry and between respective nations.
Among the more damaging blows to the company have been its inability to work with Google, Qualcomm, and others as well as a dismissal by key certifications bodies such as the IEEE and the SD Association. That came as the result of the current presidential administration in the US enacting an executive order to add Huawei to an “Entity List,” banning US companies from having anything to do with the OEM.
Although Huawei is technically allowed to conditionally continue operating with US companies thanks to a short-term Temporary General License offered by the U.S. Department of Commerce, that hasn’t restored confidence for other regions or those companies.
Companies such as Google that have returned to working with Huawei for their respective parts have typically done so on a temporary basis while removing the company from longer-term projects. For instance, Google has since removed Huawei from its list of enterprise-recommended hardware. It additionally dropped Huawei from the Android Q beta program for a short stint before eventually adding the manufacturer back.
Those bans have had a negative impact on both Huawei’s standings and the standings of its suppliers in the US but have also forced the company to more seriously consider its supply chain as tensions between the US and China continue to mount.
Huawei has gone so far as to say that it has had contingency plans in place for just such an eventuality and that any reports that its smartphone production is slowing are completely untrue. So that contingency plan appears to be what’s gone into effect now.
This will probably make the company stronger
In the short term, the pressure that Huawei now appears to have placed on its employees is decidedly bad for the company in terms of internal morale and public image, if true. In the long run, it will almost undoubtedly strengthen the company, allowing Huawei to develop its own supply chain and take a larger chunk of the market share in key areas in its home region and elsewhere.
That’s a sentiment recently shared by Tsinghua University economics professor David Daokui Li, who stated that the sanctions against the tech giant are only serving to wake “the sleeping capacity of Huawei.” That may hold true in terms of both software and hardware, with the company previously working on an Android OS replacement of its own as well as releasing handsets developed on top of Kirin-branded chipsets developed by its subsidiary HiSilicon.
Huawei has already effectively embedded itself across every relevant facet of the industry, the additional frenzy at its facilities is likely just an acceleration of those efforts. All that remains to be seen now is how that will ultimately affect the company and its standings.