Trump needs fodder for the campaign trail, maybe Huawei fits the bill
A thriving economy and low levels of unemployment might have been the focal point of President Donald Trump’s re-election campaign, pre-pandemic, but fighting the ‘red under the bed’ might have to do now.
A thriving economy and low levels of unemployment might have been the focal point of President Donald Trump’s re-election campaign, pre-pandemic, but fighting the ‘red under the bed’ might have to do now.
In 2016, Donald Trump won the Presidential election for numerous reasons, but one very important element was his ability to mobilise the vote of elements of society who wouldn’t have had any interest in politics otherwise. One reason was because of who Trump was and is, a celebrity more than a statesman, but perhaps a more critical element was the message.
Trump ignored political correctness, seemingly appealing to racism and xenophobia as the Make America Great Again slogan was born. He proposed the deportation of all illegal immigrants, the construction of a wall on the US-Mexico border and a temporary ban on foreign Muslims entering the US. The forgotten men and women of the US were the focal point of this campaign.
This campaign, focusing on a single message of foreign people are bad for patriotic US citizens, worked. If Trump is to repeat the success of his 2016 Presidential Election in November, there will have to be another message at the core of the campaign to rouse the masses and build a slogan on.
There has been a suspicion that the success of the economy and low levels of unemployment would have been this focal point. Prior to the COVID-19 pandemic, the economy was on the rise. From Trump’s entry to the Oval office on 6 January 2017, to the final days before lockdown in February, the Dow Jones grew from 19,963 to 29,398, a 47% surge. Unemployment was down to 3.5%, slowly eroding through the three-year period.
The message could have been ‘look what four years of Trump has gotten you, wouldn’t you like four more?’. But then coronavirus hit, and the economy went down the toilet.
The Dow Jones will recover, as will unemployment, but the Trump campaign would be playing with fire by making this the central point of the campaign. Many believe Trump was too slow to act against the coronavirus after spending months claiming it was little more than the common flu. At its worst point, the Dow Jones fell to 18,591 while unemployment is currently as high as 14%, and likely to go higher.
Using the economy as a reason for re-elections is offering ammunition to the Democrat candidate, the opening round of a slug match where Trump can be undermined and embarrassed.
Without this weapon in his arsenal, Trump will have to find a new focal point to build a campaign around; China and Huawei could fit the bill.
Some wacko in China just released a statement blaming everybody other than China for the Virus which has now killed hundreds of thousands of people. Please explain to this dope that it was the “incompetence of China”, and nothing else, that did this mass Worldwide killing!
Trump needs to redirect attention away from his failings as a leader during the pre-coronavirus weeks. People generally need an enemy when times are hard, and the invisible enemy of today will not do; you can’t get people angry about a virus, not in the way that the Trump campaign will want. If Trump can further vilify the Chinese, he can position himself as the hero, the man to champion US values, whatever they might be.
Huawei has been made the proxy of the Chinese Government in the eyes of the US. If the US is scared about the ‘red under the bed’, the idea of communism creeping into democratic societies secretly, the successful telecoms vendor can be made public enemy number one.
This is clearly not a new campaign of hate from the President, but it is one which had quietened off over the last few months. It is an on-going conflict point between the US and Chinese Governments, and fuel was thrown onto the embers last week.
In a new assault from the US Department of Commerce, further efforts were made to inhibit the ability of Huawei to source semiconductor components for smartphones and base stations. The US is perhaps hoping the globalised nature of the technology industry, which has allowed Huawei to thrive, can be weaponised against it as few (if any) companies could operate without a single trace of the US in its supply chain.
“We have survived and forged ahead despite all the odds,” Huawei Rotating Chairman Guo Ping said at a virtual conference this week. “The US insists on persistently attacking Huawei, but what will that achieve for the world?”
Conflict with the Chinese might not sound good for economic reasons, but for political ones, it is fantastic. Trump needs an enemy so he can be the champion of for the forgotten men and women of the US.
While it is clear there are a lot of US politicians buying into the anti-China campaign of hate, we asked Telecoms.com readers how they feel about the on-going aggression towards Huawei:
Telecoms.com Poll: Do you feel the US Government is justified in its action against Huawei?
Yes, it is effectively a pawn for the Chinese Government
Yes, but Government links are not there
Maybe, but show us the evidence of foul play first
No, Trump shouldn’t punish a company just because it is Chinese
No, international competition should be left to sort itself out
Huawei might have enjoyed a brief breather over the last few months, but the signs are there to suggest there might be greater conflict on the horizon. Speaking at the Munich Security Conference this week, Secretary of State Mike Pompeo and Secretary of Defence Mark Esper both drew battle lines.
“Let’s talk for a second about the other realm, cybersecurity,” Pompeo said during his speech. “Huawei and other state-back tech companies are trojan horses for Chinese intelligence.”
“Under President Xi’s rule, the Chinese Communist Party is heading even faster and further in the wrong direction,” said Esper. “More internal repression, more predatory economic practices, more heavy handedness, and most concerning for me, a more aggressive military posture.”
Further sanctions and more aggressive policies against Huawei specifically, as well as other Chinese companies in the international markets, could be on the horizon. Huawei executives have certainly expressed concern, but there are numerous other companies who should also be sitting uncomfortably.
The US Senate recently passed the Holding Foreign Companies Accountable Act (S.945) which could result in numerous companies who do not pass strict criteria being delisted from US stock exchanges. China is of course a target with this legislation.
“The SEC works hard to protect American investors from being swindled by American companies,” said Senator John Kennedy, one of the politicians to introduce the original bill.
“It’s asinine that we’re giving Chinese companies the opportunity to exploit hardworking Americans – people who put their retirement and college savings in our exchanges – because we don’t insist on examining their books. There are plenty of markets all over the world open to cheaters, but America can’t afford to be one of them.”
This legislation would not impact Huawei, it is a private company after all, but it is further evidence of increasing aggression towards China, and suggestions there could be rising tensions.
And while Huawei might be attracting the most attention from US Senators right now, there are certainly more which could fall into the crosshairs. Tencent owns TikTok which has already come under criticism, Alibaba is hoping to expand its cloud computing venture into international markets, while the likes of OPPO and Xiaomi are proving to be quite successful in gaining interest as challenger smartphone brands. These are all companies which would perhaps fall foul of US opinion.
The first Trump campaign rallies will give more of an indication of what will be the focus of his scorn and hatred over the coming months, and where the pent-up frustrations of US citizens could be directed. We suspect Huawei could be in for a rough few months as Trump further vilifies the Chinese Government and looks for an opponent to bureaucratically challenge during the campaign.
Taking down Huawei could be the feather the Trump campaign is looking for in its quest for re-election to the White House.
The US move to impose a ban on any US tech being used in the production of Huawei chips has sent shockwaves through the semiconductor industry.
A couple of reports illustrate this well. Bloomberg notes that the Chinese state is pumping $2.25 billion into Semiconductor Manufacturing International Corporation. This will apparently give the Chinese state even more control over the company than it had anyway and is clearly a move designed to accelerate the country’s move towards silicon self-sufficiency, despite the company name.
Meanwhile the Nikkei Asian Review reports that TSMC has stopped taking new orders from Huawei as a direct result of the US ban. This is pretty massive for TSMC as Huawei is one of its biggest customers, so you have to wonder if the decision was influenced by incentives as well as threats from the US.
Huawei, of course, is not impressed with the latest US move against it. Here’s the statement made earlier today at its virtual analyst event in full.
Huawei categorically opposes the amendments made by the US Department of Commerce to its foreign direct product rule that target Huawei specifically.
The US government added Huawei to the Entity List on May 16, 2019 without justification. Since that time, and despite the fact that a number of key industrial and technological elements were made unavailable to us, we have remained committed to complying with all US government rules and regulations. At the same time, we have fulfilled our contractual obligations to customers and suppliers, and have survived and forged ahead against all odds.
Nevertheless, in its relentless pursuit to tighten its stranglehold on our company, the US government has decided to proceed and completely ignore the concerns of many companies and industry associations.
This decision was arbitrary and pernicious, and threatens to undermine the entire industry worldwide. This new rule will impact the expansion, maintenance, and continuous operations of networks worth hundreds of billions of dollars that we have rolled out in more than 170 countries.
It will also impact communications services for the more than 3 billion people who use Huawei products and services worldwide. To attack a leading company from another country, the US government has intentionally turned its back on the interests of Huawei’s customers and consumers. This goes against the US government’s claim that it is motivated by network security.
This decision by the US government does not just affect Huawei. It will have a serious impact on a wide number of global industries. In the long run, this will damage the trust and collaboration within the global semiconductor industry which many industries depend on, increasing conflict and loss within these industries.
The US is leveraging its own technological strengths to crush companies outside its own borders. This will only serve to undermine the trust international companies place in US technology and supply chains. Ultimately, this will harm US interests.
Huawei is undertaking a comprehensive examination of this new rule. We expect that our business will inevitably be affected. We will try all we can to seek a solution. We hope that our customers and suppliers will continue to stand with us and minimize the impact of this discriminatory rule.
According to the Global Times, Huawei had a cunning plan to order loads of chips from TSMC during the grace period included in the US measures, but the Nikkei story would appear to scupper that. To add insult to injury, Nokia has just announced a 5G network deal win with Taiwan Star Telecom. It increasingly looks like Taiwan is doing everything it can to distance itself from the Chinese state, something the latter is very unlikely to take lying down.
With muted success in combating the sustained success of the Huawei juggernaut, the US has revealed its latest offensive play; attack the vendors semiconductor supply chain.
The US Department of Commerce announced new rules on Friday (May 15) designed to cause chaos in Huawei’s operations. The move is likely to douse more petrol on flaming tensions between Washington and Beijing, as the US attempts to inhibit Huawei’s ability to source semiconductor components for various products, including smartphones and base stations.
This latest action could take White House intervention beyond US borders, which would complicate matters for Huawei but also place the US at odds with allies.
“Despite the Entity List actions the Department took last year, Huawei and its foreign affiliates have stepped-up efforts to undermine these national security-based restrictions through an indigenization effort,” said Secretary of Commerce Wilbur Ross.
“However, that effort is still dependent on US technologies.”
This is the ace card which is held by the US; there probably isn’t a manufacturing site, production facility or office in the world which doesn’t have some form of US technology. The success of the US economy is now a weapon for the political elite; screw us and we’ll mess with your supply chain. It is effectively an economic dirty bomb.
While Huawei might be able to shift its manufacturing capabilities and find new suppliers to replicate the likes of Qorvo or Broadcom, it becomes a lot more difficult to remove every single element of US technology, intellectual property or software from its supply chain. If enforced properly, this could be very damaging to Huawei.
For example, it might shift some of its semiconductor purchasing to an Indian supplier, but if that company uses US software to design elements of the product it is another risk for Huawei as sales to the firm could be blocked by Washington. This is truly a trump card for the US in its continued battle.
The move comes at a time of heightened tension between the US and China which has taken a new twist over the last few months.
President Donald Trump has always found fault with the Chinese, whether it be currency manipulation or making use of Chinese vendor’s products to spy on other nations. This time the coronavirus is taking centre stage, with the US blaming the severity of the pandemic on China’s actions during the first few months, but it of course has nothing to do with the fact the White House ignored the danger of COVID-19 for two months.
The anti-China rhetoric in the US does seem to be heightening. Missouri’s Attorney General Eric Schmitt filed a lawsuit against the Chinese Government in pursuit of compensation from the Chinese Government. There are numerous other lawsuits floating around, including a class action lawsuit from the Berman Law Group which is attempting to claim the Chinese Communist Party is not entitled to immunity as it is not a foreign government or an official agency of the Chinese Government.
Legal experts have suggested these lawsuits will fail, the Foreign Sovereign Immunities Act of 1976 states governments cannot be sued, but it can serve as a temperature test for the political administration.
With sentiment once again turning against the Chinese in the US, the White House is effectively being given an endorsement to be combative with the Chinese Government. Unfortunately for Huawei, this could mean the current sanctions enforced to the letter of the law, as well as further actions being taken against the firm in the future.
The mobile industry’s default semiconductor manufacturer is building its next fab in the US, a move that could have major geopolitical implications.
Rumours of the US incentivising big chip-makers to expand their presence on US soil circulated at the start of this week and now we know their provenance. Intel is a US company anyway, so the big prise was always going to be TSMC, which has most of its operations in Taiwan. It looks like bribes offers of support from the US government were too good to refuse.
“TSMC today announced its intention to build and operate an advanced semiconductor fab in the United States with the mutual understanding and commitment to support from the U.S. federal government and the State of Arizona,” opened the TSMA announcement.
“This facility, which will be built in Arizona, will utilize TSMC’s 5-nanometer technology for semiconductor wafer fabrication, have a 20,000 semiconductor wafer per month capacity, create over 1,600 high-tech professional jobs directly, and thousands of indirect jobs in the semiconductor ecosystem. Construction is planned to start in 2021 with production targeted to begin in 2024. TSMC’s total spending on this project, including capital expenditure, will be approximately US$12 billion from 2021 to 2029.”
This development is likely to be highly antagonistic to the Chinese government. Not only is the US already trying to restrict Chinese access to the US component ecosystem, Official Chinese policy insists Taiwan is part of China. Hence every move closer to the US Taiwan makes will be perceived as a strategic threat by the CCP. It will be interesting to see how TSMC deals with the political fallout from this announcement and it wouldn’t be surprising to see it announce an offsetting move there too.
As global commercial Balkanisation ramps, countries are seeking to make themselves as self-sufficient as possible.
The coronavirus pandemic, and the consequent global shortage of things like personal protective equipment, has brought to a head how dangerous it is to be reliant on other countries for essential kit. The mounting hostility between the US and China, coupled with the fact that much of the world’s manufacturing takes place in China, has served to further stoke concern.
Now we have reports that the US government is in talks with two of the world’s biggest semiconductor manufacturers – Intel and TSMC – to build new fabs in the US. Intel has confirmed it’s in discussions with the Defense Department about improving domestic technology sources, while TSMC has confirmed it has been chatting to the Commerce Departments, but not what they discussed.
Intel has fabs in ten different locations, five of which are already in the US and only one of which is in China. As the name Taiwan Semiconductor Manufacturing Company implies, most of TSMC’s fabs are located in Taiwan, but it does have a couple in China and one in the US. In the case of Intel, the US government seems to want a fab that it can call upon to ensure supply of chips in the worst-case scenarios.
The TSMC angle is more intriguing. On a practical level it’s the world leader mobile chip manufacture, an area in which Intel has shown impressively consistent ineptitude. As smartphones have become the single most important smart device, a major interruption to their supply chain would be a significant blow to consumers, businesses and governments alike.
But the really juicy aspect concerns China’s relationship with Taiwan, which it insists is part of China. The Taiwanese people and government beg to differ and the country is a consequently key pawn in many of the geopolitical games China and the US like to play with each other. Persuading TSMC to significantly expand its presence in the US would be a major symbolic victory and seriously antagonise the Chinese Communist Party, which President Trump may consider to be reason enough alone.
The Balkanisation megatrend this would appear to be following raises at least a couple of major issues. Firstly a lot more redundancy looks set to be built into supply chains, as companies and countries wean themselves off just-in-time imports. Secondly the west seems set to adopt an ‘if you can’t beat em, join em’ approach with respect to Chinese subsidising of domestic companies to give them significant advantages over foreign ones.
While this will improve supply chain security, it will also raise prices as companies pass on the additional cost of having to make more stuff themselves and no longer being able to import wage deflation from China. It also seems to herald a permanent enlargement of the state through a greater involvement in the private economy. The cost of this ultimately has to be faced by taxpayers, so it looks like the cost of living is set to be significantly higher for the foreseeable future.
It looks like Huawei is seeking to diversify its supply chains beyond US influence by partnering with Franco-Italian STMicroelectronics.
The report comes from Nikkei Asian Review, but we’re too tight to subscribe, so we can only bring you the top-line claim. Reading between the lines, if the report is accurate, this would appear to indicate a move by Huawei to redirect its supply chain away from US companies. It seems like a matter of time before the US government bans all its companies from doing business with Huawei.
One strong indicator that the story has substance is the fact that it was re-reported by Chinese paper the Global Times. While it isn’t the official mouthpiece of the Chinese Communist Party, it didn’t get where it is today by rubbing the CCP up the wrong way, so it seems safe to assume the report has the official seal of approval.
The Global Times report quotes a Chinese analyst as saying what a great move this is for all concerned and that it also indicates a strategic move into the automotive sector by Huawei. ST is a supplier to US car company Tesla, so it will be interesting to see if the US tries to push its luck by extending sanctions to anyone who even works with US companies. The European Union might have something to say about that.
After reports emerged suggesting MediaTek has been cheating the benchmarking system, the chipset manufacturer has vehemently defending its position.
It has been alleged in AnandTech that MediaTek has been cheating the mobile enthusiasts with some clever code. In the firmware files, references were found tying benchmark apps to a so-called ‘sports mode’. When triggered (if a benchmark app has been initiated), features on the phone were ramped up to give the impression of better performance.
AnandTech claims the cheating was brought to light thanks to testing two different OPPO Reno 3 devices. The Reno 3 Pro (the European version) beat the Reno 3 (the Chinese version) in the PCMark benchmark utility, despite its Helio P95’s Cortex-A75 CPU cores being two generations older than the Dimensity 1000L’s Cortex-A77 CPU cores. And not only did the Reno 3 Pro has older MediaSet chipsets than the Reno 3 devices, it had half as many.
The difference in the test results were slightly unusual, though when a ‘stealth’ benchmark apps were used, the lower results were confirmed.
Why those in the industry feel it is necessary to cheat benchmarking tests is anybody’s guess. The negatives of being caught far outweigh the gains of impressing a few hyper-geeks, and the cheaters eventually get caught. It is embarrassing and some might ask whether they are a reliable partner. The chipsets in questions have been used in OPPO, Vivo, Xiaomi and Sony devices.
Following the original statement, which you can see at the foot of the article, an expanded blog post was offered to the industry.
“We do find it interesting that AnandTech has called into question the benchmarking optimizations on MediaTek powered devices, when these types of configurations are widely practiced across the industry,” MediaTek said. “If they were to review other devices, they would see, as we have, that our key competitor has chipsets that operate in the exact same way – what AnandTech has deemed cheating on device benchmarking tests.”
Although this is a very reasonable explanation, it is still a bit fishy. It is perfectly understandable for performance to be ramped up for some applications, but the fact the ‘sports mode’ has been linked to the initiation of a benchmarking app as well as other functions (gaming for instance) suggests the aim is to fool the tests. Most reasonable individuals would assume these tests are performed in ‘normal’ mode.
Whether this is an adequate explanation, we’ll let the court of public opinion decide, but it is somewhat of a flimsy excuse.
Original MediaTek statement:
MediaTek follows accepted industry standards and is confident that benchmarking tests accurately represent the capabilities of our chipsets. We work closely with global device makers when it comes to testing and benchmarking devices powered by our chipsets, but ultimately brands have the flexibility to configure their own devices as they see fit. Many companies design devices to run on the highest possible performance levels when benchmarking tests are running in order to show the full capabilities of the chipset. This reveals what the upper end of performance capabilities are on any given chipset.
Of course, in real world scenarios there are a multitude of factors that will determine how chipsets perform. MediaTek’s chipsets are designed to optimize power and performance to provide the best user experience possible while maximizing battery life. If someone is running a compute-intensive program like a demanding game, the chipset will intelligently adapt to computing patterns to deliver sustained performance. This means that a user will see different levels of performance from different apps as the chipset dynamically manages the CPU, GPU and memory resources according to the power and performance that is required for a great user experience. Additionally, some brands have different types of modes turned on in different regions so device performance can vary based on regional market requirements.
We believe that showcasing the full capabilities of a chipset in benchmarking tests is in line with the practices of other companies and gives consumers an accurate picture of device performance.
Networking vendor Nokia seems to have concluded silicon design isn’t as much of an in-house strength as it had hoped.
What a difference two years makes. At the start of 2018 Nokia was crowing about its unique processor skills, as manifested in its shiny new ReefShark chipset, and what a differentiator they would turn out to be. By the middle of last year, however, Nokia was forced to admit that things weren’t going according to plan, thanks largely to some strategic missteps concerning 5G.
One of the miscalculations seems to have been going big big on field-programmable gate array (FPGA) chips. These seemed like a good idea because, as the name implies, they could be reconfigured and optimised by the customer after purchase and installation, thus giving service providers the kind of flexibility they need for the 5G era. But all this agility comes at a price, which it looks like not everyone was prepared to pay.
So this week saw a couple of announcements from Nokia concerning partnerships with chip specialists. The first was with Marvell, which Nokia is now working with on a bunch of 5G chips, including improvements to its ReefShark ones. The minutiae of the partnership are not revealed, but Marvell’s thing is chips based on Arm’s microarchitecture, which are ubiquitous in the mobile world because they’re relatively power efficient.
Relative to Intel, that is, which has an almost comical history of trying and failing to introduce its significantly hotter and more power hungry x86 architecture-based chips into the mobile space. So it came as a bit of a surprise to see that Nokia is also enlisting Intel’s help with its silicon efforts. Then again, some of that collaboration is on the server side, where Intel and x86 remain preeminent, so that’s understandable, but we’re told Intel is getting involved in ReefShark too.
There was lots of talk about ‘custom silicon solutions’, which could mean more of a collaboration on the manufacturing side. That would make sense as Intel is apparently a Nokia chip manufacturing partner and its recent missteps have been a contributing factor to Nokia’s challenges. But they are also collaborating on chip design, with the Atom (yes, that brand still exists) P5900 processor cropping up in some Nokia gear.
Of the Marvell partnership, Tommi Uitto, President of Mobile Networks at Nokia, said: “This important announcement highlights our continued commitment to expanding the variety and utilization of ReefShark chipsets in our portfolio. This ensures that our 5G solutions are equipped to deliver best-in-class performance to our customers. As service providers continue to evolve their 5G plans and support growing traffic and new vertical services, the infrastructure and components must evolve rapidly. Adopting the latest advancements in silicon technology is a critical step to better serve our customers’ needs.”
Of Intel Uitto said: “This partnership highlights our continued commitment to ensuring our 5G portfolio is underpinned by best-in-class technology. 5G networks need to support billions of devices and machines, and this massive increase in volume and scale means that existing infrastructure and components must evolve rapidly, adopting technologies and techniques to enable to deploy 5G networks quickly.”
All this seems to amount to a move away from the FPGA strategy and the Intel announcement refers specifically to ASICs (application-specific integrated circuits). That’s probably the right decision, but it still represents a significant strategic climb-down by Nokia. Having spent years boasting about its in-house silicon competence, it’s now having to call in help externally to get its chip strategy back on track.