The unbelievably high cost of the war against Huawei (first analysis)

U.S. companies were selling $11 billion a year of parts to Huawei before the blockade. Losing those sales is just the start of the damage. Every other Chinese and Russian company is making sure to find non-US suppliers. The U.S. has threatened India and Turkey with sanctions as well.

As other companies replace US components, the impact will be tens of billions more than the $11 billion of Huawei suppliers. Redesigning mobile phones and other products can take from three months to three years, so sales will be lost over time.

The relative decline in sales at Qualcomm and Broadcom suggests they are seeing other customers are cutting back, not just Huawei. That isn’t certain yet, however.

European companies are considering similar self-protection. A very senior German engineer tells me German companies in automotive and electronics are also designing out components only available from the US. Given how few electronic products are produced and manufactured in the US, the ultimate impact can be huge.

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