National security is the stated reason for Trump's ban, but "the hardware isn't the problem," noted Chris Taylor, research director at Strategy Analytics.
"If governments and consumers are worried about security and privacy, they should ban or regulate Google, Internet-tracking apps, Android, Facebook, Twitter, and most apps running on phones," he told the E-Commerce Times.
"The sanctions on Huawei amount to taking it hostage for leverage in trade negotiations with China," Taylor said. They "set a bad precedent and are not warranted."
On the other hand, U.S. bans on exports of certain critical items to its allies "have kept supercomputers from being sold to Russia and states that espouse terrorism," noted Ray Wang, principal analyst at Constellation Research.
"The Huawei ban is a continuation of the greater discussion beyond trade. We are dealing with national security, trade, sovereignty and different world views," he told the E-Commerce Times.
The U.S. also is considering blacklisting five Chinese video surveillance vendors over the Chinese government's treatment of its Muslim Uighur minority, Bloomberg reported.

Making Companies Poor Again

Huawei is the smartphone industry's No. 2 original equipment manufacturer, behind Samsung. It shipped more than 59 million units in Q1 according to IHS Markit.
ARM technology is used in Huawei's Kirin chipsets. Its annual sales to Huawei total between US$320 million and $345 million, Constellation's Wang said.
Huawei has vowed to develop its own technology, but that would be a steep hill to climb.
The ban will cripple much of ARM's 5G plans and business outside of China, and create huge problems with IP in China, Enderle pointed out.
Huawei bought about $21 billion worth of chips from outside vendors last year, according to Reuters. Its HiSilicon chip division produced another $7.5 billion worth of chips.
China might replace ARM and x86 processors because of the ban, which could cost global processor sales the permanent loss of "a ton of Asian business," Enderle noted.
Other suppliers that will be impacted:
  • Corning Gorilla Glass;
  • Micron Flash storage;
  • Skyworks and Qorvo 3G and LTE chips;
  • Chip design software vendors Cadence Design Systems and Synopsys; and
  • U.S. suppliers of specialty lasers and modules such as NeoPhotonics, Lumentum and Finisar.

Killing 5G Hopes

The impact of the U.S. ban on Huawei's telecom networking customers is unclear.
Huawei has 29 percent of the global telecom equipment market, according to the Dell'Oro Group.
It is a major player in the nascent 5G arena, and the U.S. ban "will make the wireless industry more dependent on 5G infrastructure equipment that's not as advanced as Huawei's," Strategy Analytics' Taylor noted.
This will "raise costs and delay rollout, particularly where contracts have already been awarded to Huawei," Taylor said. "Strategy Analytics is still trying to quantify this."
Huawei could end up being the dominant 5G player in China, with Western companies locked out, Enderle warned.