Bloomberg
Huawei turns to fish farming and exploits after US blocks its phones
(Bloomberg) – Six months after the Trump administration inflicted a crushing blow on Huawei Technologies Co.’s smartphone business, the Chinese telecommunications giant is turning to less glamorous alternatives that could eventually offset the decline in its biggest revenue contributor. customers is a fish farm in eastern China that is twice the size of Central Park in New York. The farm is covered with tens of thousands of solar panels equipped with Huawei’s inverters to protect the fish from excessive sunlight while generating power. About 370 miles to the west in Shanxi Province with coal, wireless sensors and cameras deep under the earth monitor oxygen levels and possible machine functions in mine wells – all powered by technological titanium. And next month, a shiny new electric car with its lidar sensor will launch at China’s biggest car show. The Chinese corporation has almost wiped out a series of US sanctions, which was the lucrative consumer industry, the world’s largest smartphone maker. As the Biden government continued to put pressure on Huawei, billionaire founder Ren Zhengfei instructed the company to expand its corporate customer base in transportation, manufacturing, agriculture and other industries. Huawei is the world’s leading provider of converters and now wants to increase sales along with cloud services and data analytics solutions to help the 190,000 employees survive. “It’s very unlikely that the US will remove us from the Entity List,” Ren said last month during the opening of a mining innovation lab, partly sponsored by Huawei. “Right now we just want to work harder and keep looking for new opportunities to survive.” Ren said the new initiatives could offset the decline in its handheld device industry “more or less within this year”, although the company does not want to provide specific figures. . Its consumer unit generated revenue of 256 billion yuan ($ 39 billion) in the first six months of 2020, more than half of the company’s total. It achieved ‘marginal growth’ in sales and profit last year, thanks to record orders from 5G base stations and strong smartphone sales in the first half. Huawei has been exploring businesses outside of telecommunications devices and smartphones for years, but efforts have taken on new urgency. Phone shipments have tumbled 42% in the last three months of 2020, largely due to a Trump-era order that shifts its ability to the most advanced semiconductors, cut off. The Biden government has notified some vendors of stricter conditions on previously approved export licenses, banning items for use in or with 5G devices, according to people familiar with the move. On Friday, the US Federal Communications Commission also included Huawei in a list of companies whose telecommunications and video equipment “poses an unacceptable risk to national security”. Read more: How Huawei Got into the Center of Global Technology Struggle: QuickTake The US ban has a limited impact on Huawei’s emerging businesses, as most of the components needed are available from Chinese suppliers, according to a person who directly involved in the initiative. To meet the growing demand from contractors, including Huawei, local suppliers are pushing for better performance from mature technologies that Washington has not banned, the person said, refusing to be identified to discuss internal matters. The most advanced chips in Huawei’s converters, which are used to power the solar panel, rely on 28-nanometer technology that Chinese companies can manufacture. Other components, such as power modules, can be manufactured with 90 nm technology or older. Yangzhou Yangjie Electronic Technology Co. and China Resources Microelectronics Ltd. is one of the leading producers of LEDs in China. Each converter – slightly larger than an outdoor unit of a central air conditioner – can sell for more than 20,000 yuan, more than Huawei’s latest high-end Mate X2 folding phone. The company plans to expand more of its photovoltaic converters, as Beijing’s pressure to have carbon emissions in the world’s second largest economy peak by 2030 will result in investments in renewable energy. Just like the solar converter, the chips are necessary for Huawei’s car systems. according to one person familiar with the matter, less sophisticated than mobile processors and can be obtained in part from European providers. This allows Huawei to double the automotive industry and move engineers from other business units to work on sensors for self-driving cars and power units for electric vehicles. While the company denies that it plans to launch EVs under its own brand, Huawei has worked. with several manufacturers to test the autonomous techniques for driving and interaction between driver and car. Its entertainment features can be found in Mercedes-Benz sedans, and the firm has partnered with domestic car manufacturers such as BAIC BluePark New Energy Technology Co. to develop smart car systems. The first model under its partnership with Chinese EV manufacturer, the Arcfox αS HBT, will be unveiled at Auto Shanghai 2021 in April. Another initiative called 5GtoB involves Huawei using 5G technology in areas ranging from healthcare to aircraft manufacturing. The company helped China build the largest 5G network in the world, delivering more than half of the 720,000 base stations nationwide. Now it’s trying to help the country’s 5G connectivity help companies affected by pandemics automate factory lines – to meet fellow technology needs like Xiaomi Corp. and Alibaba Group Holding Ltd to modernize manufacturing – and thus digitize labor-intensive industries, such as mining. Huawei has signed more than 1 000 5GtoB transactions in more than 20 sectors with the help of telecommunications carriers and partners, according to the rotating Chairman Ken Hu. Online education, entertainment and transportation is one of the sectors he plans to explore, he said. In January, the firm gave smartphone tsar Richard Yu a new role to take care of its fast-growing cloud and AI businesses. “The acceptance of 5G in mining, medical services and manufacturing is becoming clearer and some of the applications are being used nationwide,” Liu said. Liehong, deputy minister of industry and information technology, said during an industry event in Shanghai last month. Ren personally leads the expansion to mining, meets with local officials and explores coal wells in Shanxi Province. “Most information technology companies did not think of mining as an area where they could make market breakthroughs, but we did,” the billionaire told reporters last month. ‘China has about 5,300 coal mines and 2,700 ore mines. If we can serve these 8,000 plus mines well, we can expand our services to mines outside China. Read more: China’s coal industry fights for survival in a greener world While Huawei’s rivalry that interchanges, electronic mining solutions and smart car software may compensate for the deterioration of smartphones, its long-term future – and its ability to continue with the rollout of China’s 5G – remains cloudy. The HiSilicon subsidiary was the country’s most capable disk drive designer, making the best processors to power the company’s smartphones and wireless base stations, before Washington gained access to the latest software design software and contract manufacturers such as Taiwan Semiconductor Manufacturing Co. For now, the company has told its wireless customers that they have enough communication chips to support base station constructions by 2021. But it is unclear how long the shares could last, and what options Huawei has once the stock is finally depleted. Wireless operators have been cautious about their 5G expansion and there is “a lot of uncertainty” as to whether Huawei will be able to continue delivering equipment in the longer term, Jefferies analyst Edison Lee wrote in a note earlier this month. “The ongoing political friction has overshadowed the business operations of Huawei and other Chinese companies in the foreseeable future, and strategic investment in emerging technology is key to Huawei’s sustainable growth,” said Charlie Dai, chief analyst at Forrester Research Inc. (Updates) said. with FCC guidance in the seventh paragraph, analyst comments in the last paragraph) Visit us at Bloomberg.com for more articles like this. Sign up now to stay ahead of the most trusted news source for business news. © 2021 Bloomberg LP