Goldman evaluating role in China’s Megvii IPO after US blacklist

Goldman Sachs said on Tuesday it was reviewing its involvement in Megvii Technology’s planned initial public offering (IPO) after the U.S. government placed the Chinese artificial intelligence firm on a human rights blacklist. In an emailed statement in response to a request for comment on the Alibaba-backed Megvii IPO, Goldman said it was “evaluating in light of the recent developments.” Goldman is a joint sponsor of the Megvii IPO, alongside Citigroup and JPMorgan Chase, which both declined to


Goldman Sachs said on Tuesday it was reviewing its involvement in Megvii Technology’s planned initial public offering (IPO) after the U.S. government placed the Chinese artificial intelligence firm on a human rights blacklist. In an emailed statement in response to a request for comment on the Alibaba-backed Megvii IPO, Goldman said it was “evaluating in light of the recent developments.” Goldman is a joint sponsor of the Megvii IPO, alongside Citigroup and JPMorgan Chase, which both declined to
Goldman evaluating role in China’s Megvii IPO after US blacklist Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-10-09
Keywords: news, cnbc, companies, chinese, firm, goldman, intelligence, evaluating, chinas, recognition, blacklist, shanghai, facial, megvii, ipo, role, public, companies


Goldman evaluating role in China's Megvii IPO after US blacklist

An attendee uses his smartphone to record a facial-recognition demonstration on himself at the Beijing Megvii booth at the MWC Shanghai exhibition in Shanghai, China, on June 27, 2019.

Goldman Sachs said on Tuesday it was reviewing its involvement in Megvii Technology’s planned initial public offering (IPO) after the U.S. government placed the Chinese artificial intelligence firm on a human rights blacklist.

The Trump administration said on Monday that Megvii and seven other Chinese companies were targeted because they were implicated in Beijing’s repression of Muslim minority populations in the Xinjiang Uighur Autonomous Region in the far west of the country.

In an emailed statement in response to a request for comment on the Alibaba-backed Megvii IPO, Goldman said it was “evaluating in light of the recent developments.” Sources had previously told Reuters the listing was scheduled for Hong Kong in the fourth quarter and might raise as much as $1 billion.

Risk consultants and Silicon Valley lawyers said that other U.S. companies involved with the blacklisted Chinese firms, whether as investors or as underwriters, are also likely to reevaluate their relationships.

Goldman is a joint sponsor of the Megvii IPO, alongside Citigroup and JPMorgan Chase, which both declined to comment.

Goldman had thoroughly evaluated the Megvii deal before initially signing onto it using its usual due diligence process, a person familiar with the matter said.

Known in the artificial intelligence business for its facial recognition platform Face++, Megvii will become the first Chinese AI firm to go public if the deal goes ahead. The company provides facial recognition and other AI technology to governments and companies including Alibaba, Ant Financial, Lenovo Group and Huawei.


Company: cnbc, Activity: cnbc, Date: 2019-10-09
Keywords: news, cnbc, companies, chinese, firm, goldman, intelligence, evaluating, chinas, recognition, blacklist, shanghai, facial, megvii, ipo, role, public, companies


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Trump’s blacklist derails Goldman’s plan to take a Chinese AI company public

President Donald Trump’s move to blacklist Chinese tech companies is threatening to derail what could be the first Chinese artificial intelligence firm to go public. Megvii Technology, a Chinese AI company known for its facial recognition platform, is among a slew of companies the White House blacklisted due to alleged human rights violations against Muslim minorities in China’s far-western region of Xinjiang. A spokesperson from Megvii said the company has no comment on Goldman’s statement. Reg


President Donald Trump’s move to blacklist Chinese tech companies is threatening to derail what could be the first Chinese artificial intelligence firm to go public. Megvii Technology, a Chinese AI company known for its facial recognition platform, is among a slew of companies the White House blacklisted due to alleged human rights violations against Muslim minorities in China’s far-western region of Xinjiang. A spokesperson from Megvii said the company has no comment on Goldman’s statement. Reg
Trump’s blacklist derails Goldman’s plan to take a Chinese AI company public Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-10-09  Authors: yun li
Keywords: news, cnbc, companies, derails, company, blacklist, china, chinese, public, technology, tech, plan, companies, spokesperson, megvii, goldmans, trumps


Trump's blacklist derails Goldman's plan to take a Chinese AI company public

An attendee uses his smartphone to record a facial-recognition demonstration on himself at the Beijing Megvii booth at the MWC Shanghai exhibition in Shanghai, China, on June 27, 2019.

President Donald Trump’s move to blacklist Chinese tech companies is threatening to derail what could be the first Chinese artificial intelligence firm to go public.

Megvii Technology, a Chinese AI company known for its facial recognition platform, is among a slew of companies the White House blacklisted due to alleged human rights violations against Muslim minorities in China’s far-western region of Xinjiang. Its planned initial public offering now might not see the light of day as Goldman Sachs, one of the IPO’s sponsors, said it’s rethinking its role due to the blacklist.

“We are evaluating in light of the recent developments,” regarding our involvement in the IPO, a spokesperson at Goldman told CNBC on Wednesday.

Megvii, backed by tech giant Alibaba, was scheduled to debut in the public markets in the fourth quarter and might raise as much as $1 billion, Reuters previously reported.

A spokesperson from Megvii said the company has no comment on Goldman’s statement.

Regarding Trump’s blacklist, Megvii said it “strongly objects to the company’s designation on the U.S. Commerce Department’s Entity List, for which there are no grounds.”

“We believe our inclusion on the list reflects a misunderstanding of our company and our technology, and we will be engaging with the U.S. government on this basis,” the spokesperson said. “Any direct business impact from this designation is expected to be minimal.”

The U.S. Department of Commerce on Monday barred eight companies, as well as 20 Chinese government entities, from doing business with American firms without being granted a U.S. government license. The Trump administration also put visa restrictions on Chinese officials “who are believed to be responsible for, or complicit in, the detention and abuse” of Muslim minority groups in Xinjiang.

The moves came just days before the U.S. and China resume their high-level trade talks in Washington this week. China on Tuesday said it “strongly urges” the U.S. to stay clear of the country’s domestic issues and remove the sanctions immediately. Asked whether China would retaliate for the blacklist, a Chinese Foreign Ministry spokesman said “stay tuned.”


Company: cnbc, Activity: cnbc, Date: 2019-10-09  Authors: yun li
Keywords: news, cnbc, companies, derails, company, blacklist, china, chinese, public, technology, tech, plan, companies, spokesperson, megvii, goldmans, trumps


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China reportedly lowers expectations for progress on trade talks this week after US blacklist

Trump rips NBA for ‘pandering to China’ but says league has to…”They have to work out their own situation,” Trump said of the dispute between the NBA and China set off by an official’s pro-Hong Kong tweet. Politicsread more


Trump rips NBA for ‘pandering to China’ but says league has to…”They have to work out their own situation,” Trump said of the dispute between the NBA and China set off by an official’s pro-Hong Kong tweet. Politicsread more
China reportedly lowers expectations for progress on trade talks this week after US blacklist Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-10-09  Authors: yun li
Keywords: news, cnbc, companies, trade, tweetpoliticsread, week, work, trump, tothey, rips, talks, reportedly, china, blacklist, nba, expectations, situation, set, prohong, progress, lowers


China reportedly lowers expectations for progress on trade talks this week after US blacklist

Trump rips NBA for ‘pandering to China’ but says league has to…

“They have to work out their own situation,” Trump said of the dispute between the NBA and China set off by an official’s pro-Hong Kong tweet.

Politics

read more


Company: cnbc, Activity: cnbc, Date: 2019-10-09  Authors: yun li
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China tempers optimism for a trade deal, says ‘stay tuned’ for blacklist retaliation

Chinese President Xi Jinping (R) and US President Donald Trump attend their bilateral meeting on the sidelines of the G20 Summit in Osaka on June 29, 2019. Chinese Foreign Ministry spokesman Geng Shuang said Tuesday “stay tuned,” when asked whether China would retaliate over the blacklist over alleged human rights violations against Muslim minorities. The comments deepened the tensions between the two economic superpowers before they resume high-level trade talks on Thursday. The White House is


Chinese President Xi Jinping (R) and US President Donald Trump attend their bilateral meeting on the sidelines of the G20 Summit in Osaka on June 29, 2019. Chinese Foreign Ministry spokesman Geng Shuang said Tuesday “stay tuned,” when asked whether China would retaliate over the blacklist over alleged human rights violations against Muslim minorities. The comments deepened the tensions between the two economic superpowers before they resume high-level trade talks on Thursday. The White House is
China tempers optimism for a trade deal, says ‘stay tuned’ for blacklist retaliation Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-10-08  Authors: yun li
Keywords: news, cnbc, companies, tuned, retaliate, chinese, foreign, retaliation, white, president, china, optimism, blacklist, trade, stay, geng, talks, tempers, house, deal


China tempers optimism for a trade deal, says 'stay tuned' for blacklist retaliation

Chinese President Xi Jinping (R) and US President Donald Trump attend their bilateral meeting on the sidelines of the G20 Summit in Osaka on June 29, 2019.

China poured cold water on hopes for a trade deal, signaling it would retaliate against the U.S. threat to put Chinese tech companies on a blacklist, just two days ahead of the highly-anticipated trade talks in Washington.

Chinese Foreign Ministry spokesman Geng Shuang said Tuesday “stay tuned,” when asked whether China would retaliate over the blacklist over alleged human rights violations against Muslim minorities.

“We urge the U.S. to immediately correct its mistake, withdraw the relevant decision and stop interfering in China’s internal affairs,” Geng said at a press conference according to a transcript on the foreign ministry’s website. “China will continue to take firm and forceful measures to resolutely safeguard national sovereignty, security and development interests.”

The comments deepened the tensions between the two economic superpowers before they resume high-level trade talks on Thursday. The White House is also reportedly discussing blocking government pension funds from investing in China, further dimming the expectations for a resolution. White House trade policy director Peter Navarro denied the reports however, calling them “fake news.”


Company: cnbc, Activity: cnbc, Date: 2019-10-08  Authors: yun li
Keywords: news, cnbc, companies, tuned, retaliate, chinese, foreign, retaliation, white, president, china, optimism, blacklist, trade, stay, geng, talks, tempers, house, deal


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Trump is now blacklisting several big Chinese companies — here’s what they do and why they are important

The move has already hit suppliers to the companies named, and roiled markets Tuesday on fears of wavering trade talks. Together, the companies show clearly the direction Commerce will continue to take with its blacklist. Namely, it’s looking at Chinese companies that are already global, that provide tech infrastructure that is hard to replace once it’s been acquired, and that could feasibly be used to bolster China’s intelligence and military organizations. Blacklisting these companies should p


The move has already hit suppliers to the companies named, and roiled markets Tuesday on fears of wavering trade talks. Together, the companies show clearly the direction Commerce will continue to take with its blacklist. Namely, it’s looking at Chinese companies that are already global, that provide tech infrastructure that is hard to replace once it’s been acquired, and that could feasibly be used to bolster China’s intelligence and military organizations. Blacklisting these companies should p
Trump is now blacklisting several big Chinese companies — here’s what they do and why they are important Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-10-08  Authors: kate fazzini
Keywords: news, cnbc, companies, important, companies, provide, tianjin, create, blacklist, big, trump, commerce, blacklisting, trade, chinese, infrastructure, heres, intelligence


Trump is now blacklisting several big Chinese companies — here's what they do and why they are important

Chairman of Hangzhou Hiklp Electronics Co., Ltd. Chen Zongnian delivers a speech during the 2nd World Intelligence Congress (WIC 2018) at Tianjin Meijiang Convention and Exhibition Center on May 16, 2018 in Tianjin, China.

The Department of Commerce added 28 new companies and agencies to its running “blacklist” of Chinese firms banned from doing business in the United States, with a notable focus on companies that specialize in artificial intelligence, machine learning and digital surveillance.

The move has already hit suppliers to the companies named, and roiled markets Tuesday on fears of wavering trade talks.

Together, the companies show clearly the direction Commerce will continue to take with its blacklist. Namely, it’s looking at Chinese companies that are already global, that provide tech infrastructure that is hard to replace once it’s been acquired, and that could feasibly be used to bolster China’s intelligence and military organizations.

Blacklisting these companies should please some in the intelligence community who have long argued that allowing Chinese companies to provide technological infrastructure to the U.S. would undercut the ability of the U.S. to defend itself. But it will also create divides with commerce organizations focused on free trade, and will likely create further disruptions in the ongoing trade negotiations between the Trump administration and Chinese president Xi Jinping.


Company: cnbc, Activity: cnbc, Date: 2019-10-08  Authors: kate fazzini
Keywords: news, cnbc, companies, important, companies, provide, tianjin, create, blacklist, big, trump, commerce, blacklisting, trade, chinese, infrastructure, heres, intelligence


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Trump’s updated China blacklist slams shares of chipmaker Ambarella

Shares of chipmaker Ambarella fell as much as 12% in extended trading on Monday after one of its Chinese customers, video surveillance company Hikvision, was blacklisted by the U.S. government. Hikvision was one of 28 companies the Commerce Department added to the so-called Entity List, restricting its ability to do business with American firms. Several component companies have been wrapped up in the U.S. government’s efforts to limit hardware manufacturers from transacting with Chinese companie


Shares of chipmaker Ambarella fell as much as 12% in extended trading on Monday after one of its Chinese customers, video surveillance company Hikvision, was blacklisted by the U.S. government. Hikvision was one of 28 companies the Commerce Department added to the so-called Entity List, restricting its ability to do business with American firms. Several component companies have been wrapped up in the U.S. government’s efforts to limit hardware manufacturers from transacting with Chinese companie
Trump’s updated China blacklist slams shares of chipmaker Ambarella Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-10-07  Authors: jordan novet
Keywords: news, cnbc, companies, companies, blacklist, updated, restrictions, trade, hikvision, ability, list, china, shares, slams, customers, chipmaker, chinese, video, business, trumps, ambarella


Trump's updated China blacklist slams shares of chipmaker Ambarella

Shares of chipmaker Ambarella fell as much as 12% in extended trading on Monday after one of its Chinese customers, video surveillance company Hikvision, was blacklisted by the U.S. government.

Hikvision was one of 28 companies the Commerce Department added to the so-called Entity List, restricting its ability to do business with American firms. Several component companies have been wrapped up in the U.S. government’s efforts to limit hardware manufacturers from transacting with Chinese companies, most notably Huawei. As the trade war intensifies, the list is expanding.

Ambarella, which makes processors for cameras and other vision systems, said in its most recent annual report that its video processing solutions are used by Hikvision, though it didn’t say what percentage of revenue comes from the Chinese company. Hikvision sells video cameras, video recorders and related equipment, and its products have reportedly been deployed to help with surveillance in China’s Xinjiang region, where Muslims have been placed in “re-education camps.”

Ambarella warned about the potential for trade conflicts to emerge in its latest quarterly report:

General trade tensions between the United States and China have been escalating in 2018 and 2019, which has, in our view, created and will continue to create an uncertain business environment. While tariffs and other retaliatory trade measures have not yet had a significant impact on our business or results of operations, we cannot predict future developments. In particular, if additional tariffs or trade restrictions are imposed on our SoC solutions or the products of our customers, or trade restrictions are imposed on our ability to conduct business with certain customers, there could be a negative impact on our operations and financial performance. For example, if trade restrictions were placed on a significant customer, such as our China IP security customers, affecting our ability to do business with them, it would likely have a material adverse effect on our business and financial condition.

Ambarella is based in Santa Clara, California, and has a $1.9 billion market cap as of Monday’s close. Other customers include Alphabet and GoPro. Hikvision is based in Hangzhou.

In addition to Hikvision, Chinese artificial intelligence companies Megvii and SenseTime are being put on the Entity List, according to an update to the Federal Register that is scheduled to be published in Wednesday.

WATCH: Qualcomm president optimistic U.S.-China trade tensions will be resolved


Company: cnbc, Activity: cnbc, Date: 2019-10-07  Authors: jordan novet
Keywords: news, cnbc, companies, companies, blacklist, updated, restrictions, trade, hikvision, ability, list, china, shares, slams, customers, chipmaker, chinese, video, business, trumps, ambarella


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Huawei calls US move to blacklist more affiliates ‘unjust’ and ‘politically motivated’

However, the Bureau of Industry and Security also added another 46 Huawei affiliates onto the blacklist. So to us, the entity list will be there for quite some time,” he said. In a statement on Tuesday, Huawei called Washington’s decision to add more of its affiliates to the Entity List “politically motivated.” “Attempts to suppress Huawei’s business won’t help the United States achieve technological leadership,” Huawei said. “We call on the US government to put an end to this unjust treatment a


However, the Bureau of Industry and Security also added another 46 Huawei affiliates onto the blacklist. So to us, the entity list will be there for quite some time,” he said. In a statement on Tuesday, Huawei called Washington’s decision to add more of its affiliates to the Entity List “politically motivated.” “Attempts to suppress Huawei’s business won’t help the United States achieve technological leadership,” Huawei said. “We call on the US government to put an end to this unjust treatment a
Huawei calls US move to blacklist more affiliates ‘unjust’ and ‘politically motivated’ Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-08-20  Authors: arjun kharpal
Keywords: news, cnbc, companies, trade, blacklist, politically, company, huawei, unjust, american, entity, list, chinese, calls, motivated, business, huaweis, security, affiliates


Huawei calls US move to blacklist more affiliates 'unjust' and 'politically motivated'

The U.S. government’s decision to add more of Huawei’s affiliates to a blacklist is “unjust” and “politically motivated” and will not help the country advance its technological leadership, the Chinese telecommunications giant said Tuesday. U.S. Commerce Secretary Wilbur Ross announced Monday that it was extending by another 90 days a temporary reprieve for Huawei to continue doing business with American companies. The deadline had lapsed on Monday. However, the Bureau of Industry and Security also added another 46 Huawei affiliates onto the blacklist. “These actions violate the basic principles of free market competition. They are in no one’s interests, including U.S. companies,” Huawei said in a statement. In May, Huawei was put on the U.S. Entity List, which restricts American firms from doing business with the Chinese company. Shortly after, Washington offered a 90-day reprieve for Huawei, allowing U.S. businesses to continue selling limited and specific products to the Chinese telecom. “As we continue to urge consumers to transition away from Huawei’s products, we recognize that more time is necessary to prevent any disruption,” Ross said in a statement.

Some American rural mobile networks use Huawei gear while some U.S. technology component companies rely on a significant portion of revenue from the Chinese giant. Ross reiterated his concern that Huawei poses a national security threat. The U.S. has maintained that Huawei’s equipment could be used as a backdoor by the Chinese government to spy on Americans, allegations the company has repeatedly denied.

‘Unjust’

Speaking to The Associated Press, Huawei founder Ren Zhengfei said Tuesday he expects no relief from Washington and his company was making plans as if American export restrictions will not go away. “Right now, attacking Huawei in the United States is politically correct, while helping Huawei even once would put them under significant pressure. So to us, the entity list will be there for quite some time,” he said. In a statement on Tuesday, Huawei called Washington’s decision to add more of its affiliates to the Entity List “politically motivated.” “Attempts to suppress Huawei’s business won’t help the United States achieve technological leadership,” Huawei said. “We call on the US government to put an end to this unjust treatment and remove Huawei from the Entity List.” The company added that the decision “won’t have a substantial impact” on business. Huawei Chairman Liang Hua said that “neither production nor shipment has been interrupted, not for one single day.” Still, earlier this year, Huawei slashed its revenue forecast and predicted a $30 billion hit to its revenues over the next two years.

It’s clear to me at least, that the president views Huawei as a bargaining chip and a pressure point for a trade deal. James Pethokoukis Fellow at the American Enterprise Institute

Huawei has been focusing on trying to develop more of the core technology that had been provided by U.S. companies. The telecom equipment maker is continuing to design its own processors and modems for smartphones. It also recently released its own operating system called HarmonyOS, even though it currently uses Google’s Android for its smartphones and Microsoft’s Windows for laptops. Richard Yu, CEO of Huawei’s consumer business, said last week that if the company is permanently cut off from Google, it could switch to the new operating system “immediately.”

Huawei a ‘bargaining chip’

Huawei has been caught up in the broader U.S.-China trade war. President Donald Trump has sent mixed signals over the last few months about the fate of Huawei in the U.S. In May, Trump said that it was “possible that Huawei would be included in a trade deal.” But just this weekend, he said he didn’t want to do business with Huawei “because it is a national security threat.” Some experts have suggested that the Chinese tech firm is being used as a “bargaining chip” in the U.S.-China trade war.

“It’s clear to me at least, that the president views Huawei as a bargaining chip and a pressure point for a trade deal. … There are certainly those in the administration that would like to kill this company and they view it as kind of an opening shot in a long-term cold war with China,” James Pethokoukis, Dewitt Wallace fellow at the American Enterprise Institute, told CNBC’s “The Exchange ” on Monday. “I just don’t see evidence that Trump thinks that.” “That’s the president’s problem,” Pethokoukis added. “If he’s calling it right now that they’re a national security issue, if that’s the case, then it’s hard to come to a trade deal that doesn’t involve some sort of limitation on Huawei. It’s hard to see the end game there.”


Company: cnbc, Activity: cnbc, Date: 2019-08-20  Authors: arjun kharpal
Keywords: news, cnbc, companies, trade, blacklist, politically, company, huawei, unjust, american, entity, list, chinese, calls, motivated, business, huaweis, security, affiliates


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Huawei’s US research arm Futurewei to lay off hundreds of workers

A Huawei logo is pictured at their store at Vina del Mar, Chile July 18, 2019. The U.S.-based research arm of China’s Huawei Technologies — Futurewei Technologies — announced worker layoffs on Monday, according to two Futurewei employees. The layoffs come about two months after the U.S. government put Huawei on a trade blacklist, making it illegal for its U.S. subsidiary to transfer sensitive technologies to its parent. The blacklist also restricts Huawei from purchasing products from U.S. techn


A Huawei logo is pictured at their store at Vina del Mar, Chile July 18, 2019. The U.S.-based research arm of China’s Huawei Technologies — Futurewei Technologies — announced worker layoffs on Monday, according to two Futurewei employees. The layoffs come about two months after the U.S. government put Huawei on a trade blacklist, making it illegal for its U.S. subsidiary to transfer sensitive technologies to its parent. The blacklist also restricts Huawei from purchasing products from U.S. techn
Huawei’s US research arm Futurewei to lay off hundreds of workers Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-07-22  Authors: lauren feiner
Keywords: news, cnbc, companies, technologies, layoffs, worker, futurewei, huawei, workers, usbased, universities, research, lay, huaweis, arm, vina, work, hundreds, blacklist


Huawei's US research arm Futurewei to lay off hundreds of workers

A Huawei logo is pictured at their store at Vina del Mar, Chile July 18, 2019.

The U.S.-based research arm of China’s Huawei Technologies — Futurewei Technologies — announced worker layoffs on Monday, according to two Futurewei employees.

The layoffs come about two months after the U.S. government put Huawei on a trade blacklist, making it illegal for its U.S. subsidiary to transfer sensitive technologies to its parent. The blacklist also restricts Huawei from purchasing products from U.S. technology companies.

Futurewei was set up in part to work closely with U.S. universities and researchers.


Company: cnbc, Activity: cnbc, Date: 2019-07-22  Authors: lauren feiner
Keywords: news, cnbc, companies, technologies, layoffs, worker, futurewei, huawei, workers, usbased, universities, research, lay, huaweis, arm, vina, work, hundreds, blacklist


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‘No pressure’ from US to blacklist Huawei: Canadian minister

06:18 | 8:05 AM ET Fri, 17 May 2019


06:18 | 8:05 AM ET Fri, 17 May 2019
‘No pressure’ from US to blacklist Huawei: Canadian minister Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-06-03
Keywords: news, cnbc, companies, minister, canadian, blacklist, et, 17, pressure, 0618, 805, 2019, huawei


'No pressure' from US to blacklist Huawei: Canadian minister

06:18 | 8:05 AM ET Fri, 17 May 2019


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Huawei has enough inventory to ‘weather’ US blacklist for months: Analyst

For now, Huawei’s smartphone business has five to six months’ worth of inventory, and its 5G networking equipment business has nine to 12 months’ worth of supplies, going by CLSA estimates, Sebastian Hou, investment analyst at CLSA, told CNBC on Friday. Amid elevated U.S.-China trade tensions, Washington last week added Huawei to a blacklist that curbs its ability to do business with American firms. “For the rest of the year, I think the company should be fine on smartphones and networking equip


For now, Huawei’s smartphone business has five to six months’ worth of inventory, and its 5G networking equipment business has nine to 12 months’ worth of supplies, going by CLSA estimates, Sebastian Hou, investment analyst at CLSA, told CNBC on Friday. Amid elevated U.S.-China trade tensions, Washington last week added Huawei to a blacklist that curbs its ability to do business with American firms. “For the rest of the year, I think the company should be fine on smartphones and networking equip
Huawei has enough inventory to ‘weather’ US blacklist for months: Analyst Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-05-24  Authors: weizhen tan
Keywords: news, cnbc, companies, equipment, business, weather, networking, hou, huawei, huaweis, months, tsmc, blacklist, analyst, smartphone, inventory


Huawei has enough inventory to 'weather' US blacklist for months: Analyst

A worker packs up new smartphone devices at the end of the production line at Huawei’s production campus on April 11, 2019 in Dongguan, China.

For now, Huawei’s smartphone business has five to six months’ worth of inventory, and its 5G networking equipment business has nine to 12 months’ worth of supplies, going by CLSA estimates, Sebastian Hou, investment analyst at CLSA, told CNBC on Friday.

Amid elevated U.S.-China trade tensions, Washington last week added Huawei to a blacklist that curbs its ability to do business with American firms. That restriction was partially eased days later , in an effort to minimize disruption for the Chinese telecommunications giant’s partners, but most experts warn the company now faces significant uncertainty .

Chinese technology giant Huawei has enough inventory to sustain its smartphone and 5G networking equipment businesses for most of the rest of the year, according to brokerage and investment firm CLSA.

“For the rest of the year, I think the company should be fine on smartphones and networking equipment,” he said. “In the short term, they still have enough inventory to weather through this period, but the inventory will be used up eventually. So how these trade talks will progress in the next few months is still pretty critical to (its) future survival.”

Notably, Hou said that Huawei subsidiary HiSilicon, which designs chips for Huawei equipment, has been increasing its capability in the last few years and is able to supply 80% to 90% of Huawei’s needs.

In fact, HiSilicon’s capabilities are “stronger than most may know,” said a CLSA research report from Hou and others dated May 20.

Ultimately, Huawei’s survival is highly dependent on whether Taiwan Semiconductor Manufacturing Company — the world’s largest contract chipmaker — can keep doing business with it. In fact, TSMC is “crucial” to Huawei, that report said.

“No matter how great HiSilicon’s chip designs are, it cannot live without TSMC, as TSMC manufactures all HiSilicon’s advanced chips. This means TSMC is critical to Huawei’s survival and Trump’s plan to block Huawei and China.”

For now, TSMC has said that its shipments to Huawei are not affected by the U.S. action to curb the Chinese firm’s access to American technology.

In a bid to reduce its reliance on U.S. suppliers, Huawei has in recent years invested in its own chip technology, especially for smartphone processors and 5G chips.


Company: cnbc, Activity: cnbc, Date: 2019-05-24  Authors: weizhen tan
Keywords: news, cnbc, companies, equipment, business, weather, networking, hou, huawei, huaweis, months, tsmc, blacklist, analyst, smartphone, inventory


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