
Huawei Manages to Make Smartphones Without American Chips - kaushikktiwari
https://www.wsj.com/articles/huawei-manages-to-make-smartphones-without-american-chips-11575196201?mod=rsswn
======
throwGuardian
The be honest, American companies never had a monopoly in any of the parts
needed to build a commercially viable phone. Unlike say in the PC world, where
the dominant OS/Software stack has an almost impenetrable reliance on x86,
phones were mostly ARM based (in an attempt to prevent Intel's chokehold). And
communication standards require FRAND patent grants allowing anyone to build
for the spec.

That said, even as recently as a decade back, China was routinely written off
as a cheap imitation of US/Japan/Korea in the electronics industry, Huawei &
friends have proven otherwise. Their flagships are on par with the Apples and
Samsungs, and even lead them on velocity of feature releases, especially
hardware

~~~
fluffything
> Unlike say in the PC world, where the dominant OS/Software stack has an
> almost impenetrable reliance on x86

Huawei also makes its own x86 chips, GPUs, and even FPGAs (e.g. TPU-like
systems), and while Huawei Cloud still runs other vendors hardware, it's
becoming more and more "Huawei-hardware only" each quarter.

I think the US has not realized yet how good it had it, and how much it has
screwed things up. The EU, Russia, India, Japan, and China are all super-
dependent on Intel, AMD, and NVIDIA's products, and therefore, the US, on many
critical sectors. By showing China/Huawei [0] how much this dependence can
hurt, the US has forced China to become technologically independent, and if
China succeeds, then all other super powers will have a real and viable
alternative to US products.

Right now, e.g., the EU is on the "let's ban all Huawei products, China spies
on us!" boat, but the wind can change very quickly to "let's ball all US
products, the NSA spies on us!" any time - it doesn't matter that the actual
truth is that, no matter who you buy from, they are going to spy on you.

I personally think that it's good for another global player to enter the
sector. I don't think it will disrupt it in any major way, but it is already
affecting prices, e.g., in the cloud sector, where we are finding out how much
are customers willing to pay to "avoid" a Chinese cloud, and it isn't that
much.

[0] In case you did not know, Huawei _is_ China.

~~~
t0ddbonzalez
> 'Right now, e.g., the EU is on the "let's ban all Huawei products, China
> spies on us!" boat'

Really? Citation please.

Mike Pompeo's been going around Europe threatening dire consequences for any
country which uses Huawei tech ("We won't work with allies that use Huawei
equipment in their 5G networks", etc.), but I haven't heard of any calls for a
ban at EU level...

Can you show me some proof that the EU wants to ban Huawei products?

~~~
fluffything
There aren't any EU level bans - I don't think the EU government has authority
for that.

What currently exist is a lot of controversy around using Huawei in Europe:

* Huawei products banned from being used by all of Spain's Department of Defense projects and personnel: [https://www.reddit.com/r/China/comments/e4ntuk/huawei_smartp...](https://www.reddit.com/r/China/comments/e4ntuk/huawei_smartphones_are_banned_by_spains_ministry/)

* Angela Merkel Faces Part revolt over allowing Huawei to build 5G: [https://www.dw.com/en/angela-merkel-faces-party-revolt-over-...](https://www.dw.com/en/angela-merkel-faces-party-revolt-over-huawei-in-german-5g-rollout/a-51372875)

* Germany Intelligence Services argues that Huawei cannot be trusted: [https://www.bloomberg.com/news/articles/2019-10-29/german-sp...](https://www.bloomberg.com/news/articles/2019-10-29/german-spy-chief-says-huawei-can-t-be-fully-trusted-in-5g)

and many more. This is enough to nudge public opinion in one particular
direction (Huawei == evil), and politicians sometimes do what voters want over
here.

This is obviously a quite brittle status quo, and one or two impactful
articles here and there about how the US / NSA "collect data" on EU citizens
might be enough to turn the wind the other way.

The real news behind all of these articles is that China is now perfectly able
to compete with the US technology companies at this particular level. That's
interesting because for many countries, depending on the US for most of their
electronics is a big risk worth minimizing, so I expect a shift from a US
dominated industry to a balance between US and Chinese technologies being
integrated in these countries. Nobody wants to exclusively depend on China
either.

~~~
t0ddbonzalez
Exactly. There is no EU call to ban Huawei infrastructure, so I'm mystified as
to why you claimed 'the EU is on the "let's ban all Huawei products, China
spies on us!" boat'.

The links you posted show that government departments in a couple of EU
countries refuse to use Huawei, nothing more...

~~~
fluffything
I'm not sure I follow you. My claim means that there is the opinion in the EU
that Huawei should be banned. For some reason you understand that as "The EU
banned Huawei". That's not what I claimed, and I have no idea how you get from
one to the other.

------
rootsudo
I checked out a Huawei store - they're the same asthetic as an apple store
with a ton more useful tech then an ipod, macbook and imac.

The phones were impressive and very affordable. We're talking $200-300 for 6gb
ram devices, 128gb storage, etc.

Google, Apple are right to be worried.

~~~
takeda
Google and Apple are just milking it. Smart phones were introduced a decade
ago. Flagship phones costed then around $500, now we got to the point that
they costing $1,000+ like if mass producing wouldn't cut the cost down. On top
of that making a battery be non removable and constantly over-volting the
batteries to reduce their life. Ultimately phones become useless after 2
years, unless you replace batteries yourself or pay someone to do it for you.

~~~
gruez
>Smart phones were introduced a decade ago. Flagship phones costed then around
$500, now we got to the point that they costing $1,000+ like if mass producing
wouldn't cut the cost down.

If making smartphones is really as easy as you make it out to be, and
smartphone prices are rising, then why isn't that being captured in the global
profit share? Considering that Androids are vastly more popular than iOS
phones, there would be no reason why Apple's getting 62% of global profits.

[1] [https://www.statista.com/statistics/780367/global-mobile-
han...](https://www.statista.com/statistics/780367/global-mobile-handset-
profit-share-by-vendor/)

~~~
takeda
Can't view your link.

~~~
gruez
seems like you need a search engine referrer to unlock the paywall.

------
OnlineGladiator
This is really impressive for Huawei. I do not mean to say that the trade war
between China and the US is the same as the Cold War from before, but I have a
fun tidbit to share.

One of the more interesting theories I heard for why the US won the Cold War
is because Russia struggled to develop IC technology. The Russians were
masters of espionage, and I would even give them the edge in mechanical
engineering, but the United States' ability to master electrical engineering
proved more important. They just couldn't build computers like the US, and
computers proved to be _wildly_ important for technological breakthroughs.

[https://en.wikipedia.org/wiki/History_of_computing_in_the_So...](https://en.wikipedia.org/wiki/History_of_computing_in_the_Soviet_Union)

Now that Huawei has figured out how to do it without us, it's really become
autonomous. This is great news for China, and will help them enormously in the
ongoing trade war. And obviously it's not so great for the US.

~~~
lsc
>And obviously it's not so great for the US.

There's a lot of confusion, I think, about how you "win" a trade war; as far
as I can tell, autarchy is pretty bad for all involved; trade wars seem like a
thing where everyone loses and the 'win' comes from winding down the trade war
and trading again.

~~~
onlyrealcuzzo
It's seems uncommon for people to consider if our trade with China before this
"war" was fair.

It seems like most people just parrot: "War. Bad."

I'm not saying this administration is doing everything right on trade, or that
it's even doing anything right on trade.

It just seems like people think that what was before "the trade war" was the
default, and that the default was fair.

~~~
thawaway1837
You’re right. It wasn’t fair.

It was heavily weighted in favor of the US which is why the US became the
richest country in the world and benefited the most from international trade.

Classic example are the complaints about Apple products being manufactured in
China. However, as study after study has shown, a $600 iphone probably leads
to economic activity of about $40-$50 in China at most, with a further $50 or
so in the rest of the world, and the remaining $500 being generated in the US.

The US had a massive problem which is that this tremendous wealth that was
generated was thanks to a variety of reasons concentrated amongst a few people
right at the top, and unlike in decades in the past the benefits stopped
trickling down to the rest of the country. But the real problem was an
internal distribution one, which the current administration only served to
exacerbate.

------
kyboren
Even if those chips are completely devoid of American-origin IP cores, they
almost certainly were designed with American-origin EDA software.

I am not sure if such chips would be covered by existing export bans or if EDA
software licensing agreements prohibit export of produced design files to
countries subject to US export bans.

If neither is the case, I expect either or both to change soon.

~~~
Cyph0n
Excellent point. I would say it would be more impressive if China were to
build its own EDA tools.

At this point, I think the US should start protecting its EDA companies from
Chinese investors.

~~~
monocasa
I really doubt that the EDA software is really that much of an investment
these days. It's the lithography tech that's the real crown jewel, and it is
being protected.

~~~
Cyph0n
> I really doubt that the EDA software is really that much of an investment
> these days

If EDA tools were so simple, why don't the big IC design companies -- e.g.,
Intel, Apple, Samsung -- just build their own in-house tools instead of paying
millions in license fees?

> It's the lithography tech that's the real crown jewel, and it is being
> protected.

Sure, but lithography tech is useless unless you have access to solid tooling
for design verification. In IC design, no one can afford to debug issues after
the chip is fabricated. EDA toolchains include complex simulation software
that, when combined with fab-provided models, allow you to simulate circuit
behavior down to the lowest level.

~~~
monocasa
Millions is not that much. TCO of six engineers for a year gets you into
millions. If it's a solved problem, it's probably worth just buying off the
street.

~~~
Cyph0n
I hope someone can correct me in this thread, but I recall hearing that a
single-seat license can cost ~$50k per year. I would imagine that any company
with a large number of ASIC engineers would love to reduce that overhead.

Regardless, none of what you said disagrees with the point that EDA tools are
complex and should therefore be protected from Chinese influence.

~~~
monocasa
You always get screwed in niche B2B on a single seat license. There's no way
the chip manufacturers are actually spending anywhere near that much.

And they really aren't that complex. China has more than enough capability to
reproduce them.

I guess I'm not sure how to prove a negative here. What do you think is so
special about EDA software that isn't fairly easy replicable? Other than the
fab design rules, which if I'm making a litho vs EDA distinction in the first
place aren't really a part of EDA.

~~~
Cyph0n
And I’m not sure why you still think that EDA tools are so simple. I guess
we’re at an impasse, then.

Going back to my first comment: I would be extremely impressed if China is
able to build a home-grown, state-of-the-art EDA toolchain. I also still think
that the US should work to protect its existing advantage in this area.

~~~
thawaway1837
The poster isn’t saying they are simple. The poster is claiming they are
complex enough that they are non trivial to create and maintain, and not
expensive enough that it’s worth it for these companies to go through the
effort to create an alternative. (50k per seat, which almost certainly is
lower on an enterprise license, is about 20-25% of the cost of an employee,
and probably lower when you consider the non salary costs of an employee such
as benefits, payroll taxes, office seat rent, food, etc). The equation
obviously changes when the lack of availability of the tool is an existential
threat and therefore worth billions.

------
userbinator
It's worth noting that Chinese smartphones without any US components have been
available for a _long_ time, based around SoCs from Mediatek and
Spreadtrum/RDA.

------
bhouston
I predicted this and it will continue:
[https://news.ycombinator.com/item?id=20303157](https://news.ycombinator.com/item?id=20303157)

I think we are in this awkward time where China is shifting from playing catch
up to the US to taking more of a lead in some areas that are meaningful. This
type of transition is awkward for all involved, but it was going to happen and
these sanctions moved it forward a bit.

I am still surprised that the sanctions didn't have that much of a financial
effect on China or at least us in the west didn't notice it very much.

------
simonblack
"Once bitten, twice shy."

"Never turn away a paying customer."

Once those markets go, they never come back. And you're on the slippery slope
to irrelevance.

~~~
pochamago
That's a two way street, there are plenty of American companies switching to
Philippine or Vietnamese manufacturers that won't ever go back to sourcing
from China

~~~
thawaway1837
Yup. So the US has created a new competitor and didn’t gain anything in the
bargain other than paying for the transition.

It would be one thing if this was done after, say, the TPP that ensured that
Phillipines and Vietnam created an IP a regime that protected US company
interests before they started manufacturing there, but that’s not what
happened.

------
neonate
[http://archive.is/utNwf](http://archive.is/utNwf)

------
vpcs111fm
Don't worry. Huawei barely gets to manage the fund itself from Chinese banks.
And the moment that US DOJ launches secondary boycott on Huawei and its
financial affiliates & financiers, believe me -- it won't last months.

The most important thing is the financial power. The current wrestle between
China and the US (entailing Huawei and Chinese trade deals) is all about the
US wanting to forcefully open up Chinese financial markets -- which China will
never do.

It would be exciting to see how the new trade deals would unfold.

------
beloch
I'd be curious to know if Huawei phones and network devices are currently
being used for surveillance in Hong Kong.

~~~
fluffything
Probably. Snowden showed that every phone in the USA is used for surveillance
by the NSA. I don't have any reason to expect China to be any different.

~~~
sebastianconcpt
Exactly. Yet I found NSA surveillance INFINITELY less dangerous than China's.

~~~
downrightmike
A large part of that is the oversight panel that is in charge of looking at
the program has publicly acknowledged that the programs are not finding
anything. [https://www.nbcnews.com/news/world/nsa-program-stopped-no-
te...](https://www.nbcnews.com/news/world/nsa-program-stopped-no-terror-
attacks-says-white-house-panel-flna2D11783588)

------
ausjke
Huawei had to license synopsys/cadence/mentor to design their chip(which is
using ARM core), if US really wants to play hardball Huawei's IC design can be
killed nearly instantly once those CAD design software is forbidden. In the
meantime I heard Huawei etc bought a few years' license right before the trade
war, they're actually well prepared.

Another way is to restrict chip manufacturing, Taiwan pretty much owns the
best technology for that(TSMC), Intel/Samsung has some, Huawei has none.

And you have Android to some degree, without Android there is no Smartphone
dominance from China as of now. Open source in general helped China to catch
up and overtake the west extremely efficiently, you don't need any business
spies anymore, just download/modify/profit.

At the moment USA still has the possibility to contain IC ecosystem if it
really wants to do that. In 10~20 years it will be a different story though,
by then USA might not have much leverage if anything at all left.

~~~
spectramax
I am not sure about large companies, essentially every small to mid-sized PCB
design/manf company in China uses pirated EDA software, primarily Altium
Designer, OrCAD and Mentor Graphics. In fact, piracy of sofware is encouraged
by the CCP - I won't name the websites, but in order to get a download link
you need a WeChat or Baidu account which is ultimately linked to Citizen ID or
Passport through phone number (OTP). Yes, I setup a Windows VM to get access
to these sites where you need to install a Baidu download manager in your
operating system.

There is also specific Chinese forum lingo that is used to thank people who
post pirated software ("1st floor", "2nd floor", etc.)

------
Barrin92
I think the US is making a big mistake by falling back to isolationism and
confrontation in a sort of last-ditch attempt to reign Chinese progress in.

The prevailing quite chauvinistic attitude among many people outside of Asia
is that because of their lack of political liberalism China or other Asian
countries will always be stuck with copying or being the manufacturing bench.
I think this will turn out to be a grave miscalculation and that the trade
wars will only accelerate the decoupling and strengthen the Chinese regime's
narrative to develop at all costs.

I think many people in the West really are not aware how deeply the resentment
goes in Chinese society to not be bullied around ever again, the mentality
really is 'better-broken jade than intact tile', and it's hard to compete with
that.

~~~
thewileyone
I agree, many have underestimated China resolve to be number one. Many also
don't understand China's history because they've gone through much more
suffering than a trade war in the last 50 years.

------
gretagretagreta
Anyone has an outline link or something?

~~~
overlordalex
Try [http://archive.is/9jQd1](http://archive.is/9jQd1)

------
throw7
I'm unable to read the full article (paywall), but going on only the title,
this is a good thing.

------
m3kw9
Should add inferior in the sentence

~~~
madiathomas
I have a Huawei P30 Lite which I use for work purposes. Build quality is
better than Samsung. I prefer using it over my iPhone. It is nowhere near
inferior. Did I mention that it is supposed to be a cheap phone but its
performance is impressive?

------
onepointsixC
Articles whose content contradict their headlines are rather quite
frustrating. The title is "Huawei Manages to Make Smartphones Without American
Chips"

But the article itself states: "While Huawei hasn’t stopped using American
chips entirely, it has reduced its reliance on U.S. suppliers or eliminated
U.S. chips in phones launched since May"

And it's graph shows significant usage of US chips.

I'm sure Huawei is trying it's best to reduce its dependence on US chips, and
thanks to access to chips from the EU, Taiwan, JP, it likely will succeed. But
I can't help but be annoyed at the thought that Taiwan and Japan are relying
on the US to protect them from the same CCP they're short sightedly profiting
from.

~~~
tomhoward
Your comment has some validity, but the title doesn't seem false; the key
point is that Huawei's new flagship product, the Mate 30...

> _contained no U.S. parts, according to an analysis by UBS and Fomalhaut
> Techno Solution_

~~~
onepointsixC
I missed the statement on the Mate 30. I guess the chart combined with other
parts of the article threw me off.

------
roenxi
The US basically started a slow-motion kidnapping of Meng Wanzhou in December
2018. The ban on US shipments to Huawei might have sped the process up, but I
imagine they already saw this as personal.

Best of luck to them I say.

------
krn
How likely it is that Huawei got access to the technology behind Samsung's
Exynos[1] to speed up the development of their own ARM chips? At least that's
what happened with Samsung's foldable screen technology[2].

[1]
[https://en.wikipedia.org/wiki/Exynos](https://en.wikipedia.org/wiki/Exynos)

[2] [https://www.bloomberg.com/news/articles/2018-11-29/south-
kor...](https://www.bloomberg.com/news/articles/2018-11-29/south-korea-
charges-11-with-selling-samsung-technology-to-china)

~~~
krn
Where I am coming from[1]:

> CNEX, a microchip company backed by Microsoft and Dell, has filed new
> allegations in a Texas lawsuit accusing Chinese tech giant Huawei and one of
> its executives of stealing trade secrets.

> It's the latest filing in a suit set to go to trial June 3. CNEX claims that
> Huawei spent years trying to steal its data storage secrets.

And also[2]:

> "We expect other nations will want to become self-sufficient in critical
> technologies. That's what we'd expect of a responsible government," he said.
> "The issue isn't that China has set out to do that. It's that part of their
> industrial policy, part of the way they try to accomplish that, is state-
> sponsored theft or creating an environment that rewards or turns a blind eye
> to it."

> He pointed to evidence of such behavior allegedly linked to the "Made in
> China 2025" strategic plan. The Chinese government introduced the plan in
> 2015, designed to reduce dependence on imported technology in 10 priority
> industries including robotics, IT, aviation, railway transport and
> biopharma. "We've charged cases, I believe, in eight of those 10 sectors, IP
> theft cases," Hickey said.

[1] [https://www.cnbc.com/2019/05/22/huawei-executive-accusetd-
of...](https://www.cnbc.com/2019/05/22/huawei-executive-accusetd-of-stealing-
trade-secrets-from-axas-company-backed-by-microsoft-and-dell.html)

[2] [https://www.cnbc.com/2019/09/23/chinese-theft-of-trade-
secre...](https://www.cnbc.com/2019/09/23/chinese-theft-of-trade-secrets-is-
on-the-rise-us-doj-warns.html)

