Ren Zhangwei tells the Economist and the NY Times he is prepared to give the US essentially everything the President has asked, including the crown jewels: the complete design and source code of Huawei’s 5G system. Ren
would license the entire Huawei 5G platform to any American company that wants to manufacture it and install it and operate it, completely independent of Huawei.
This actually would be a brilliant move if the US buys in. (Unlikely.) Huawei has no chance to make significant sales in the US, as the Democrats and Republicans compete on who will “be tougher” on China. A 10-25% royalty – which is cheap for the complete system design – would bring Huawei $billions more than it would otherwise earn in the US.
Any deal would be a boost to US manufacturing, speed 5G deployment, and provide a good answer to any security issues. It remains unlikely for US political reasons.
Nokia and Ericsson would have far more to fear if a Huawei deal brought Cisco into the market. Both have lost billions the last three years and cannot afford to yield market share to a Cisco.
This is completely unheard of in today’s technology world. 20 years ago, a chipmaker like Intel would authorize a second source like AMD because customers wouldn’t buy otherwise. That went out of style a long time ago.
Trump strongly believes in strengthening American manufacturing. That’s all but impossible in 5G. No American company has been able to deliver a major wireless network since Alcatel gobbled Lucent in 2006. Bringing a full 5G system to market would require an investment of billions.
The security forces shouldn’t complain if a cooperating company like Cisco builds the complete system and controls the source code. Like most real news in the spook space, the facts are obscure.
It’s quite plausible that nothing will satisfy the NSA other than complete access to everything on the systems around the world. The industry assumes the NSA has the near-total cooperation of Nokia, Ericsson, AT&T, Verizon, etc. The only facts we know come from Ed Snowden.
Cisco is Huawei’s natural partner on US 5G. Cisco Germany Managing Director Uwe Peter says the company plans to invest $5B in 5G over the next 3 years. It has quietly been winning several 5G core contracts, leads in switches and routers, but doesn’t have a 5G radio offering.