Panasonic Denies Cutting Off Ties With Huawei Amid US Pressure Campaign

Sheri Evans
May 24, 2019

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Japan's Panasonic said on Thursday (May 23) that it is suspending business with Huawei after a U.S. ban on the Chinese firm over security fears, and in a potentially more consequential blow, United Kingdom chip designer Arm Holdings, an important supplier to Huawei, also said it has halted relations with it.

Flynn said Panasonic's business with Huawei involves the supply of "electronic parts", but declined to provide further details.

The U.S. government last week restricted technology sales to Chinese telecom gear suppliers because of alleged security risks, though telecom carriers got a 90-day grace period to let them find other suppliers.

"The US use of state power to arbitrarily exert pressure on a private Chinese company like Huawei is typical economic bullying", Foreign Minister Wang Yi said on Wednesday at a meeting in Kyrgyzstan of the Shanghai Cooperation Organisation (SCO), a regional security group led by Beijing and Moscow. If business is halted, Huawei could find it hard to produce its own chips for smartphones.

Arm Holdings issued its statement after the BBC reported that the firm had told staffers to suspend dealings with Huawei.

If Huawei faces a setback due to the US-China trade war, it would affect or delay the rollout of 5G technology not only in the US but also in China.

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"We're pausing the launch of the new Huawei 5G smartphones coming to market", said a spokesman, adding that EE is working with both the Chinese firm and Google to "make sure we can carry out the right level of testing and quality assurance" for customers.

The Rural Wireless Association, which represents carriers with fewer than 100,000 subscribers, estimates that 25 per cent of its members have Huawei and ZTE in their networks, and have said it would cost US$800 million to US$1 billion to replace it. Her government had already concluded that such a ban would be illegal.

Britain, which has used Huawei equipment in its telecom networks for more than a decade, also insists that it has the situation under control.

But Mr Howett thinks that a ban on Huawei could be problematic, not just for EE but for all the UK's operators, because it is in a significant part of their networks. In the wake of the US Government executive order that restricts US companies from doing business with the Chinese tech company, the repercussions are mounting.

A similar story goes for Germany-based Infineon Technologies which says some of its supplies come from the US.

"There is no current government guidance to suggest we should not use Huawei, but if the guidance changes we will reconsider".

The UK is trying hard to not alienate the United States or China at a time when it needs both superpowers and their trade and investment to buffer the likely effects of Britain's planned departure from the European Union, said Leslie Vinjamuri, head of think tank Chatham House's Americas program.

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