Huawei founder Ren Zhengfei has said the R&D business unit in Silicon Valley will be uprooted and relocated to Canada.
The closure of R&D functions in the US should come as little surprise considering the Entity List and President Trump’s xenophobic tendencies, though the Canadians will be pleasantly surprised at being selected.
“The research and development centre will move from the United States, and Canada will be the centre,” Ren said to Canadian newspaper The Globe and Mail.
“According to the US ban, we couldn’t communicate with, call, email or contact our own employees in the United States.”
Although the specifics have not been unveiled, Huawei has had to let go of some employees as a result of the ban on working with US companies, and this news will not be welcomed by the remaining. Huawei will continue its presence in the US, it is still in the courts fighting the US Government, though it does appear the bulk of operations will be shifted north to the politer side of the border.
What impact this will have on the relationship between the US and Canada remains to be seen. Although the Canadians would have gained some favour in during the arrest of Huawei CFO Meng Wanzhou, relations have been often strained between Trump and Canadian Prime Minister Justin Trudeau.
Last October saw the end of tension between the two nations ended as the duo came to a trade agreement. Once again, Trump was throwing his weight around, but this time it worked, as Trudeau bowed to pressure easing barrier to entry for US firms into the Canadian diary market.
Canada is an interesting country for Huawei, as there is no official, long-term position for the firm in the communications infrastructure ecosystem. The Government is yet to make any concrete statements, though as there are existing relationships with some of the telcos, there is a lot on the line.
In February, Telus said its 5G deployment strategy would be delayed by a Huawei ban. The company uses Huawei radio and optical transmission equipment for its 3G and 4G networks and continues to believe the company does not present a national security risk to Telus or its customers. Bell has said it would not be convenient but not the end of the world, which Rogers primarily works with Ericsson.
For Huawei, this could be a very positive move. Opening an R&D lab in the country could bolster relationships in a new market as it is quite clear there will not be any material wins in the US.