08.10.20 - Qualcomm is trying to make the case to the White House that restricting the sale of advanced components to Chinese telecom giant Huawei won’t stop the company from being able to obtain the necessary components for 5G phones. Qualcomm is actively trying to convince policymakers that it will only hurt US firms and potentially bolsters foreign competitors through the ban. Huawei is at the top of the United States export blacklist.
Qualcomm’s position is that the US ban is essentially handing over an annual $8 billion market to Qualcomm’s foreign competitors. The restrictions were put in place by the Trump administration citing national security risks. In July the British Government took similar actions, barring British firms from doing business with Huawei in effort to protect the security of their own telecommunications infrastructure.
This demonstrates the complexities of competing policy priorities within the Trump Administration. Making it difficult for Chinese companies to expand in influence, while still bolstering domestic technological supremacy. For the ban to ultimately be truly effective, the government must find a way to prevent competitors from filling the demand void. Samsung is not subject to these export restrictions and as a result stands to absorb this market over time.
Qualcomm does make a strong case as its inability to do business globally and thus ceding the market to foreign competitors would hinder its ability to push forward with more research and development and threatens long term US interests to maintain technological supremacy. The government would need to further work to bring Europe, Japan, and South Korea into the fold to back these foreign policy initiatives if it wants its policy to be effective and not hurt US firms in the process.
Source: Wall Street Journal