In the wake of the US Department of Commerce’s pronouncements on Huawei, the company has sought to project confidence. In public, Huawei said that it long been planning for the day when the US would limit its access to western technology by stockpiling chips and developing “spare tire” parts in house, and that its reserves will mitigate restrictions.

This claim is disputed by an anonymous author claiming to be a former high level Huawei research division employee. A short article published May 24, condensed below, was pulled from WeChat shortly after going viral, but lives on the pages of less scrupulous Chinese websites. TechNode has not been able to verify where the piece was first published. The repost linked below credits Fuza Yanjiusuo (Complexity Research Institute), a WeChat public account with only three articles currently available.

Huawei high level worker: regarding ‘spare tire’ chips, there’s no chance

published anonymously

There are several departments that specialize in “spare tires.” For example, though Huawei is using Android, it is also developing a mobile OS. [At first] I didn’t understand why. Being big just for the sake of it isn’t that efficient. Modern technology is a product of companies’ specialization of labor…colleagues in these ‘spare tire’ departments don’t have future prospects, aren’t very efficient, and receive lower bonuses—naturally, people lose their peace of mind at work and you can imagine how their work product suffers.

Afterwards I realized that Ren Zhengfei knew “Imperialism” [i.e. America] and Huawei can’t piss in the same pot. After seeing ZTE’s situation, Huawei started getting prepared. Anyway, Chinese labor is cheap, it’s human wave tactics; you can throw a wide net and maybe end up catching a big fish.

The author goes on to argue that “good enough” tech doesn’t work in today’s environment:

First you need an environment, or what we would refer to as an ecosystem. You need upstream and downstream product support, and a ton of users. If your products are full of bugs, no users will have the patience for you and spend money on your stuff…

Chip manufacturing includes instruction set architecture and other design patents, test equipment, and tools, such as Godson’s MIPS command architecture and the ARM command architecture on Android phones. These require authorization and licenses from foreign manufacturers.

You can spend five years making your own command architecture and not relying on others. But if no one else follows your playbook, your ecosystem won’t develop, the upstream and downstream (compilers, operating systems, chip solutions, terminals, applications, etc.) won’t get developed, and eventually you will arrive at a dead end.A similar example is China’s alternative 3G architecture TD-CDMA [which had no global takers].

What’s more, a lot of application chips are just hardware implementations of computing architectures and computing algorithms. Most architectures and algorithms in China don’t have their own IP and require authorization and licencing from foreign manufacturers…CCTV says 100% of them are Chinese intellectual property, but this is total bullshit.

I carefully read the recent letters Huawei leadership sent to its staff.  As soon as I saw it, I knew it was classic Huawei.  “In the desolate night a hero goes out to battle, never to return” [风萧萧兮易水寒,壮士出征兮不复还—an ancient poetic tag describing a desperate mission], like when you’re walking outside alone at night, whistling loudly, to give yourself confidence. But in particular with regards to HiSilicon, the semiconductor company, according to industry insiders, this is totally ridiculous, “injecting chicken blood” [getting hyped up over something trivial].

For a company like Huawei that uses a lot of general purpose chips, breaking off access right away means the company will be totally screwed. HiSilicon doesn’t have the slightest possibility of meeting the needs of Huawei’s complete product line. They couldn’t even design half the needed chips. [All these chips that Huawei uses in its products] are like air; even though usually you barely notice it’s even there, as soon as it’s gone, you start choking to death.

Therefore, if the US breaks off access (by the way, the US accounts for over 80% of the world’s high end chips) Huawei only has a 1% chance of survival. Oh, and that’s not even factoring in that the US has a near monopoly on the software used to design chips.  

Ren Zhengfei wants to independently develop all the chips, software, and an operating system. To achieve this demands a miracle of the scale never seen before in the history of mankind.

Good luck with that, Huawei!  

Jordan Schneider

Jordan Schneider is a freelancer based in Beijing and the host of the ChinaEconTalk podcast.

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