U.S. Considers Requiring 5G Equipment for Domestic Use Be Made Outside China – The Wall Street Journal

What happened: The Trump administration is seeking to require all equipment for next-generation 5G networks used in the US be designed and manufactured outside of China. The move would expand its ban on Chinese telecoms giant Huawei to all Chinese companies, as well as foreign companies that manufacture products in China. Officials are asking telecom equipment makers whether they can develop US-bound hardware including cellular base stations, routers, and switches as well as software outside of China. US officials said they are acting urgently because telecom operators are starting to build their 5G networks to power a “fourth industrial revolution,” which “will be built on the telecommunications networks being constructed today. It is critical that those networks be trusted,” a Trump administration official said.

Why it’s important: Without using telecoms equipment from Huawei and another Chinese firm ZTE, US carriers would have to choose from Sweden’s Ericsson and Finland’s Nokia to build their 5G networks. But the two European companies both rely on manufacturing products in China. Analysts cited by the WSJ said China represented 45% of Ericsson’s manufacturing-facility area and 10% of Nokia’s in 2018. Also, there is no major US manufacturer of cellular equipment.

Writing about semiconductors and telecommunications.

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