Huawei more innovative than IBM, Facebook, or Tesla

BCG data
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In an unscientific but large poll by Boston Consulting Group, Huawei was ranked the 6th most innovative company in the world, eclipsing some of the most respected companies in the world. Its US$20 billion research budget ranks with Apple, Google, Amazon, Microsoft, and Samsung, the only companies perceived as more innovative.

Trump’s war has done wonders for Huawei’s reputation. Two years ago, Huawei was the leader in telecom but little known outside it. When the most powerful nation on earth expressing mortal fear, people outside the industry took note.

Few of the 2,500 “senior executives” surveyed are experts in innovation. Nearly none have the time for close study. They are too busy doing their jobs. There’s no absolute measure here.

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Beat the Boycott? Shifting HiSilicon Engineers to Tsinghua Unigroup/Unisoc

State-controlled Unisoc is hiring many engineers from HiSilicon, report Digitimes & Business Korea. Unisoc (once known as Spreadtrum)is already shipping a 5G chip, the T7510. It’s made in a 6nm process at TSMC. See UNISOC/Ziguang Zhanrui & Hisense: Yet Another 5G competitor.

With the additional engineering talent, there’s no reason Unisoc can’t match and reproduce Huawei’s state-of-the-art 5G and other chips. Unigroup’s other subsidiary, Yangtze Memory, employs 2000 engineers. It is producing 64 layer 3D NAND chips in volume and sampling 128 layer chips, close to the state of the art. It just broke ground on a facility designed to triple production. See Yangtze Memory proves Chinese semiconductors can be competitive. Unigroup expects to invest US$24 billion in memory chips.

Being born in Seoul or California does not mean you will be better able to design chips. HiSilicon engineers have designed chips equal to the best of Qualcomm and Intel. If Unisoc hires many of them, it will quickly be able to match almost any chipmaker.

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Massive Mediatek orders probably for Huawei

TSMC has been ordered not to sell chips to Huawei after September 1, so Huawei is finding other sources. Mediatek, #2 wireless chipmaker, already supplies certain Huawei models. It has now reserved massive capacity at TSMC to produce 7nm and 5nm chips. No other phone maker has a reason to order so many more chips from Mediatek, so they will almost certainly go to Huawei.

While Trump believes he can give orders to TSMC because some of its equipment is made in the U.S. US authority has not been extended to customers of TSMC, like MediaTek of Taiwan. Presumably, the U.S., Taiwan, and the People’s Republic are having an intense discussion behind the scenes, but so far Mediatek has not been blocked.

Huawei has numerous ways to get chips. They are reported to be discussing a large buy from Samsung. Samsung may also be able to produce chips for Huawei in a special facility that does not use U.S. equipment.

MediaTek strongly denied Japanese press reports they would just be a front for Huawei’s chips. Instead, it would sell its standard chips to all comers, including Huawei.

My Major Error: The U.S. Can and Did Block Huawei at TSMC

“I make many mistakes,” the Butler said. I make many mistakes as well in the course of writing so much and I regret every one of them. Some are careless, inevitable from a human author but worth minimizing. Some are bad analysis or inadequate understanding, from which I must learn.

Some are hubris. In 2019, I told the Washington Post that Huawei will survive and thrive despite the American attacks. For almost a year, sales actually grew while profits and cash remain high. I also was confident Taiwan would not allow crucial foundry TSMC to cut off Huawei. My comment was, “China would treat that as an act of war.”

TSMC is one of only two companies that can manufacture the 5nm and 7nm chips required for premium 5G phones. It is a critical chokepoint that worries everyone in the industry. An earthquake in Taiwan could crash the chip and technology supply chain.

I was wrong. I have the knowledge to evaluate the chips and technology. It was hubris for me to make a judgment about politics.

Huawei is already finding ways to evade the blockade. China is spending $10’s of billions to build domestic chip plants by whatever means necessary. The Chinese factories and chip design software are years behind. It would take a miracle to catch up in less than 4 or 5 years.

China has delivered many technological miracles in the last decade and I wouldn’t count them out.

B__________. Huawei is not “owned or controlled by the Chinese military.”

Reuters mis-reports ” The Trump administration has determined that top Chinese firms, including telecoms equipment giant Huawei Technologies and video surveillance company Hikvision, are owned or controlled by the Chinese military … The DOD document also includes China Mobile Communications Group and China Telecommunications Corp.”

The truth is the first casualty in a war, but Reuters editors should have known better. The question of Huawei’s ownership has often been discussed in the press. The company’s answer, that it is owned by an employee trust, is pretty clear, although the decisions of that trust are not transparent. It appears a handful of senior employees have defacto control.

Since the U.S. has targeted Huawei, hundreds of agents have investigated the company with the full power of National Security Agency tools. It’s highly likely that if the military were in control, there would be evidence found by now. I have no proof but the inference is well supported.

The claims about China Mobile & China Telecom are clearly false.

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Huawei Near the Top in Innovation

Boston Consulting Group surveyed 2500 senior business executives. Many had never thought about Huawei until the U.S. went to war, but apparently they are impressed.

Boston Consulting Group survery

Alibaba and Tencent also ranked. Chinese protection of domestic companies is apparently a good idea. Surveys like this are popularity contests and not always accurate. I’m reporting it because ITIF, a D.C. outfit, made a specious claim Huawei was not innovative. Beltway blindness.

Huawei Matebook is not like every other notebook

The camera is built into the keyboard and pops up when used. You can pair the PC with selected Huawei phones to run apps and move files, with NFC making the connection. Matthias Kremp calls it a “smartphone whisperer.”

Huawei is going after the MacBook Air with this machine. The resolution is 3000 x 2000, higher than the Air. The price is also higher than the Air in some configurations. It’s only 3 pounds and a little more than a half-inch deep. Like the Air, the power button turns on the machine and verifies your fingerprint.

It has a sensitive touchscreen that fills nearly the entire body (91%.) By putting the camera on the keyboard, there’s no need for a notch on the screen. It’s good for security but the angle is unflattering for video calls.

It has quad speakers and quad microphones. The later have intelligent noise reducing features so that voice features work well. Possibly even dictation.

According to the reviews, Huawei has a machine in the class of the MacBook for people who don’t want to buy

Huawei loses orders in Singapore, ZTE in India

Ren has spent 30 years building Huawei and keeping out of politics. Huawei has become so large the U.S. government is running scared. Almost everyone – including the British Prime Minister and the German Chancellor – believes the US attack on Huawei is about commerce, not security.

But corporations are pragmatic. “Operators who have the choice are electing not to go with Huawei out of precautionary principle,” writes a very well informed Australian as the Singapore carriers choose Europeans over Huawei. Singapore is predominantly Chinese and the carriers have close relations with Huawei. They chose to protect themselves from US retribution.

India and China fought a deadly battle at 4,000 meters in the Himalayas. Immediately, a public cry went up to boycott the Chinese. ZTE had won the contract at India’s government telco, BSNL but Economic Times now reports that it will be rebid with ZTE and Huawei excluded.

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Google ex-CEO: China apparently hacking Huawei systems

Eric Schmidt in retirement chairs the Pentagon’s Defence Innovation Board and has a top security clearance. He would know if the hundreds or thousands of analysts the U.S. has tracking Huawei had found any substantial espionage. The NSA has a $50 billion budget and is very good at what they do. If they haven’t found anything significant, it almost surely isn’t there.

Everybody outside Western security forces, including Germany’s Angela Merkel, has pointed out there is no evidence that Huawei has done any spying. Schmidt, talking to the BBC, is probably the first informed source to make a meaningful claim. Talking to the BBC, he made the interesting claim

“There’s no question that information from Huawei routers has ultimately ended up in hands that would appear to be the state. However that happened, we’re sure it happened.”

If you accept my assumption above, that Huawei is not spying, there’s a sensible conclusion: The Chinese security folks have cracked Huawei routers. That’s highly likely; almost anything crackable and the Chinese are good. (The Americans may still be more advanced.)

Of course, the only way Schmidt could know what the Chinese have is if the NSA had hacked China, exactly what he is accusing them of doing.

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Blockade Coping: Huawei Delays

Civil War blockade

“We now see the postponement of the mass production of Mate series will be for at least one to two months,” Nikkei quotes, as Huawei develops new designs to use Mediatek and perhaps Samsung processors. Blocking TSMC at Hisilicon is forcing Huawei to scramble for alternate chip sources. Alternate chips are never exactly the same and time needs to be taken for redesign.

Samsung may be able to produce 7 nm advanced chips for Huawei despite the U.S. blockade. “It has built a small, 7nm production line that doesn’t use U.S. equipment,” Lucy Liu reports at EET Asia. There’s no official confirmation, but EE Times has a strong reputation for accuracy.

Nikkei and others have reported that Huawei has 6 to 18 months of chips stockpiled.

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Huawei Tops in Patent “Essentiality”

A technical examination of over a thousand patents in 5G found Huawei had the strongest claims. The patent system at every level is distorted, especially in standards-essential patents (SEP.) Companies have claimed over 10,000 patents are essential to 5G, looking for a share of over one hundred billion in royalties.

34% of Huawei’s declared patents are “essential,” according to very experienced analysts at Amplified and GreyB. 34% qualifying is a disappointing result, but better than Qualcomm (30%,) Nokia (27%) or Ericsson (22%.) I believe many of these patents will be rejected in court as obvious or not sufficiently original,

The Western world was shocked when Huawei emerged on top of the international counts of patents a few years ago. Innuendos suggested that Huawei was filing bad patents rather than original innovative work. Some came from commercial envy.

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U.S. Demand: No Foundry, Anywhere, Can Produce Huawei Chips

If a Chinese foundry, using only Chinese equipment, produced a chip for Huawei, the U.S. could impose draconian sanctions according to the latest rules from the U.S. Commerce Department. Thet’s the plain meaning of the order:

If an entity … produces or develops an integrated circuit design utilizing specified Category 3, 4, or 5 “technology” or “software” such as Electronic Design Automation software … that foreign-produced integrated circuit design is subject to the EAR.

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