A couple of interesting things are happening in the global 5G space. First of all, unlike the U.S. government, reasonable minds are seeing that Huawei, and other Chinese companies, are necessary elements in today’s wireless ecosystem.
Recently, GSMA and the 3GPP have implemented a new accreditation scheme for a more level playing field that equipment vendors can use to show they are fair players.
It is called the Network Equipment Security Assurance Scheme (NESAS) and is designed to promote the development of the next levels in mobile communications. So far, most the major players have signed on and are willing to meet its requirements. This platform is designed to clean up the security segment of the industry and uses independent security audits to validate hardware.
Now, backing up for a moment, there is no doubt that Huawei, early on, was not exactly the model nice guy when it came to nefarious goings-on. But then, neither is anyone else.
The bottom line – everybody spies, everybody lies. And if one thinks that China is the only country that ties its hardware and companies to spying, well, come out from under the rock, already. A few months ago, Germany’s equivalent of our NSA (called the Bundesnachrichtendienst – BND) got caught, red-handed, doing much the same thing our NSA got caught doing a few years ago.
And, get this, a few months ago, in a San Diego Superior Court hearing, Andre Chartrand, a former vice president of engineering for Solarflare Communications claims he was illegally fired as retaliation for his refusal to cooperate with the U.S. government in “illegal international espionage.” The objective was to embed “spy software” in their products intended for Chinese customers.
This time it just happened to be China’s turn in the pickle barrel. It got caught and has, since then, made attempts to become a more model player. That is the way it works. Once you get caught, you get punished. Then you are supposed to change your ways, and get back in the game (yes, I am one of those who, naively, still believes in the better side of human nature). However, since that is not generally the way it goes, society develops bounds in the form of a variety of directives (laws, regulations, governing agencies, legislation, etc.) to “encourage” honesty.
In that vein, the 3GPP standards body has created this program to help vendors “stay honest.” And guess who is onboard – Chinese vendors; yes, Huawei being one of them. This is a good idea. Having a global standard for transparency is an ideal concept and will help to keep the players honest.
So, I believe Huawei has made the necessary changes to ensure its equipment becomes part of the vendor network of trusted hardware.
However, the sad thing is that this administration is just going to keep on driving with its horse blinders on, to take what they see as revenge on against Chinese companies.
China is not alone. President Donald Trump has reinstated tariffs on aluminum against Canada. He also, refused to remove 15 percent tariffs on Airbus aircraft and 25 percent tariffs on other European goods, despite moves by the European Union to resolve the 16-year-old dispute over aircraft subsidies). But Trump has gone to extraordinary means to try and destroy Huawei, and other related Chinese vendors. And, sadly, he has had some success.
However, aside from the economic effects U.S. policy has had on China, there is fallout here as well. For example, U.S. policy has had a serious effect on our semiconductor industry. Between the pandemic and the decoupling of China’s technology, the semi industry, which was already hurting from a surplus of parts and a decline in prices, has taken around a 20 percent hit (more or less depending upon whom you talk to), overall. And without China, the industry is struggling to reinvent itself under the U.S. restrictions.
To wit, the two top trade groups representing the semi industry SEMI and SIA just laid waste to the Trump Administration’s recent expansion of U.S. restrictions on sales of chips and software to Huawei. They adamantly (as I have discussed in several missives and one webcast) believe this will, eventually backfire and undermine the semiconductor industry in the United States with lost sales, not only to Huawei but globally. They also question what the end game is by the administration. IMHO, I believe this to be a personal vendetta and not a logical trade and economic move.
To try and compensate, the U.S. government is looking to pour in $10 billion in the form of grants, loans and tax incentives. However, this government throwing money at it is not going to move the needle all that much. All the shifting we did from China to other vendors (such as Ericcson, Nokia, Samsung, etc.) will not guarantee our leadership, either.
Even though China may be taking a technology hit in the short term, it will recover and continue to do bleeding-edge research and development – without the United States. This is a global ecosystem and we need global collaboration to continue being at the forefront of research and development. It is unlikely the U.S. semiconductor industry will stay at the forefront of the industry if this line is held.
Additionally, time and again this administration has shown its ignorance in understanding the complexities of global interconnect. Removing China from the technology node by itself is a ridiculous move.
However, to my point about this administration’s lack of understanding about tech, it has also cut the H1-B visa program off at the knees. Earlier this month, our illustrious leader signed an executive order banning technology workers on H-1B visas. He thinks this will ensure that federal agencies hire American workers and not people on an H-1B visa. While this is only for federal agencies, the trickle-down effect is that non-federal agencies that have government contracts are also in the crosshairs.
I have been in engineering all of my adult life and have worked with many, many H1-B engineers form all over the globe. I have to say, this order is a terrible idea. We have a tremendous pool of engineering talent. However, we do not have an exclusive on brainpower. Therefore, another myopic decision made by Trump will have us struggling to find talent from abroad when we need it.
These are but some examples of how this narcissistic leader, and the rest of the government Sinophobes, take steps to serve their own purposes, without regard to the fallout.
Much of this is like turning the Titanic – it takes a while to get the turn started, it takes a while to make the turn, and it takes a while to stop the turn. And, like the Titanic, the turn this country is making will not get us out of the path of the imaginary iceberg this administration sees.