2019-06-12 09:21:14

Intel is pushing the U.S. government to allow it to continue supplying components to Huawei Technologies, a senior executive from the American chipmaker told financial news outlet Caixin at a forum in Washington.

Peter Cleveland, a vice president of Intel Corp., argued in favor of discussion over regulation in dealing with the embattled Chinese telecommunications equipment maker, which has been blacklisted by the U.S. government over national security concerns.

“It’s better to try to reach mutually agreed solutions to improve cyber hygiene versus taking regulatory steps that are so dramatic and impact the American company as well as the Chinese company,” Cleveland said on the sidelines of a Chinese investment forum Monday. Cleveland is a vice president in Intel’s legal department and also the company’s deputy general counsel for government, markets, and trade.

His comments followed reports that the White House’s acting budget chief, Russell Vought, had asked to postpone instituting a provision of the 2019 National Defense Authorization Act that bars any executive agency, government contractor, or company receiving government loans or grants from using Huawei equipment.

Vought, who made the request in a letter to U.S. Vice President Mike Pence, warned that the law could dramatically reduce the number of companies that would be able to supply the U.S. government, thereby burdening American companies.

The Trump administration has repeatedly accused Huawei, the world’s largest maker of telecom network gear, of potentially spying for Beijing. It has been pressing allies to exclude the company from supplying equipment for their 5G networks, the fifth generation of cellular phone network technology. The administration has also blacklisted the Chinese company, cutting off the supply of American components it needs to make smartphones and networking gear.

After the ban was imposed, companies like Google, Qualcomm, and Intel severed business ties with Huawei. But the administration later offered a 90-day reprieve for companies to adjust.

Google has also joined Intel in asking the White House to exempt it from the ban, the Financial Times reported last week. It said Google executives worry that the ban will force Huawei to develop its own mobile operating system, potentially compromising U.S. national security.

New Huawei phones are reportedly not able to support Google apps such as the Gmail email service and Chrome web browser, further dampening Huawei’s ambition to become the world’s top smartphone maker by the end of this year. The Chinese company said it has been developing its own mobile operating system, scheduled for launch soon.

Cleveland told Caixin that Huawei is a successful and iconic Chinese company that has grown its business all over the world, and that Intel values its partnership with the organization. “So we tried to work with the White House and the (U.S.) Department of Commerce and the other agencies on an intense cooperative basis to find a right solution and give them ideas about how to work effectively with China and important companies like Huawei,” he said.

While a potential lifeline might be on the way, Huawei said it could miss its goal of becoming the world’s top smartphone-maker this year. The Chinese brand surpassed Apple to become No. 2 in the first quarter of 2019, trailing only South Korea’s Samsung.

Shao Yang, chief strategy officer of Huawei’s consumer business, said Tuesday in Shanghai that the company “may take longer” to become the top player in the market, without elaborating on why.

This is an original article written by Zhang Qi and Jason Tan of Caixin Global and has been republished with permission. The article can be found on Caixin’s website here.

(Header image: A person holds a Huawei mobile phone in front of the logo of U.S. chipmaker Intel in Izmir, Turkey, May 28, 2019. Emin Menguarslan/Anadolu Agency/Getty Images/VCG)