Tuesday 18 June 2019

Ireland is Huawei's fifth biggest supplier

On the out: Google is said to have suspended business with Huawei
On the out: Google is said to have suspended business with Huawei
Donal O'Donovan

Donal O'Donovan

IRELAND is the joint fifth-biggest foreign supplier to Huawei, with annual sales of $1bn (€895m) a year to the controversial telecoms giant.

Over the weekend US President Donald Trump dramatically moved to restrict American companies' ability to sell to Huawei, hitting the shares of some of the world's biggest component-makers.

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The US move comes amid fraught trade talks with China that have already seen the White House hike tariffs. The US regards Huawei as a potential security risk, seeing the world's second-biggest manufacturer of telecoms equipment as dangerously close to the Chinese government.

Chip makers Intel, Qualcomm, Xilinx and Broadcom have all reportedly suspended supplies to Huawei until further notice. Google is also reported to have suspended all business with Huawei that requires the transfer of hardware, software and technical services - except those from so-called open-source licensing.

The presence of so many US multinationals in Ireland means this country is among those most exposed to Huawei's supply chain. The US ($23bn), Taiwan ($6bn), Japan ($3bn), and Hong Kong ($2bn) dominate supplies to the Chinese company. However Ireland, Finland, Germany, the Netherlands and South Korea also each have sales of $1bn a year to the company, according to data from Bloomberg.

Non-US companies can continue to trade with Huawei regardless of the US administration's actions, but some may opt for a cautious approach, and complex supply chains means it can be difficult to prise out the US element in manufacturing processes.

Analysts at Morgan Stanley said that a collapse of US-China trade talks and a hike in tariffs on Chinese goods would push the world economy towards recession.

Additional reporting Bloomberg

Irish Independent

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