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    Blocked From US Market, Huawei Chipmaker Pens Scathing Letter

    HiSilicon’s president says the company has been stockpiling backup chips in preparation ‘for survival in extreme circumstances.’

    HiSilicon, a subsidiary of Huawei Technologies that designs chips for the Chinese telecommunications behemoth, said Friday that it has stockpiled a covert supply of backup products in the event of a ban on buying advanced technologies from the United States — the day after the Trump administration severely curtailed Huawei’s ability to conduct business in the U.S.

    In a combative letter apparently penned by HiSilicon’s president, He Tingbo, and later verified by Reuters, the company said that years ago, it had “prepared for survival in extreme circumstances, on the presumption that there would come a day when all American advanced chips and technologies would be unobtainable and Huawei would still need to maintain client services.”

    Describing the preparations as a “long march in the history of technology,” He wrote that HiSilicon had successfully “guaranteed the strategic safety and continued supply of most products.”

    On Wednesday, the U.S. Department of Commerce added Huawei and 67 of its affiliates to the so-called Entity List, a development that effectively prohibits the telecom giant from purchasing equipment from American companies without the government’s permission. Three imprints of HiSilicon — a Shenzhen-based semiconductor company that designs chips for Huawei’s equipment — were included in the ban.

    Huawei said yesterday that it opposes the ban and will seek “support and solutions.” The Chinese government, meanwhile, has loudly decried the ban as “discriminatory.”

    In a tone by turns offended, defiant, and self-satisfied, He’s letter described the move as a “dark day” and “the (American) superpower’s utterly merciless severing of the technological and industrial systems based on global cooperation.” She went on to characterize HiSilicon’s backup components as “spare tires” whose stockpiling had finally paid off: “Years of blood and sweat have come good overnight … all our efforts have turned the tide at the vital moment.” He’s letter did not elaborate on the backup chips other than to claim their existence.

    When Sixth Tone contacted HiSilicon for comment, the call was redirected to Huawei, whose operator declined to connect us with the public relations department. Neither HiSilicon nor Huawei immediately responded to emailed requests for comment.

    On the Chinese microblogging site Weibo, He’s letter met with a slew of patriotic reactions. In one particularly chest-thumping comment on the Communist Youth League’s official page, a user proclaimed that having tamed floods like the ancient Egyptians, cast bronze like the Babylonians, philosophized like the ancient Greeks, conquered the world like the Romans, and become as wealthy as the medieval Arabs, China has little to fear from the Americans. “For the last 5,000 years, we’ve always sat at the card table with the rest of the world,” the post asserted. “The only thing that’s ever changed is the players sitting opposite us!!”

    Other netizens alluded to more recent history. “Whatever foreigners sanction us, we make things ourselves!” one wrote. They kicked out our researchers, but we still made the atomic bomb! They locked us out of the aeronautics field, but we still put the Shenzhou (spacecraft) into orbit! They didn’t let us onto the (International) Space Station, but we still built Tiangong-1!”

    HiSilicon designed more than $7.5 billion worth of chipsets for Huawei in 2018, compared with approximately $21 billion worth brought in from external sellers, said Huawei’s rotating chairman, Eric Xu, in a March interview with Reuters. Manufactured in Taiwan, HiSilicon-designed chipsets appear in some of Huawei’s smartphones, although Huawei also buys chips from other semiconductor companies, including American outfit Qualcomm.

    The U.S. ban on Huawei comes amid concerns over the company’s links to the Chinese state. Although Huawei has on multiple occasions denied that it is subject to government influence, several nations — including Australia, New Zealand, and Japan — have banned Huawei from all or part of forthcoming 5G telecom networks on the grounds that China may leverage the company’s involvement for future espionage.

    In late 2017, a similar U.S. ban on another Chinese telecom firm, ZTE, nearly forced the company out of business before the payment of huge fines saw the prohibition lifted.

    Additional reporting: Wang Yiwei; editor: David Paulk.

    (Image: IC)