A high-level executive of Huawei said Monday the company will find a solution to a new rule announced by the Trump administration that effectively cuts the Chinese telecommunications equipment maker off from global chip suppliers.

Why it matters: This is Huawei’s first official response to the new rule change made public on Friday. The company said it is still evaluating the impact of the new restrictions.

  • The rule, announced by the US Commerce Department, requires companies around the world to obtain licenses for sales to Huawei of semiconductors made with US technology.

Details: The Commerce Department’s rule would “inevitably” harm Huawei’s business to a great extent, said Guo Ping, the rotating chairman of Huawei, in a press conference Monday at the company’s headquarters in Shenzhen. He added that the company is confident that it would find a solution soon.

“The US believes being in the lead in technology is a base of its global supremacy, and that any country with advance technology would pose a threat to its supremacy. Unfortunately, Huawei is taking a lead in the information and communications technology (ICT) sector.”

Guo Ping, rotating chairman
  • The world’s largest telecoms equipment maker described the new rule as “arbitrary” and “pernicious,” warning that it would “undermine the entire industry worldwide.”

“Huawei categorically opposes the amendments made by the US Department of Commerce to its foreign direct product rule that target Huawei specifically. This new rule will impact the expansion, maintenance, and continuous operations of networks worth hundreds of billions of dollars that we have rolled out in more than 170 countries”

Huawei spokesman Joe Kelly, reading from a company statement during the press conference.
  • The company, which was also added to a Commerce Department “Entity List” a year ago that bars it from sourcing components and technology from US companies, said the new rule would damage international companies’ trust in US technology.

“Ultimately, this will harm US interests.”

Huawei in the published statement

Context: The Trump administration’s new rule, effective Friday but with a 120-day grace period, will block companies around the world from using American-originated equipment and software to design or produce chips that are supplied to Huawei or its subsidiaries.

  • Companies can apply for a license to continue shipping those products to Huawei, but the Commerce Department had said the presumption would be to reject those requests.
  • Nikkei Asian Review reported Monday that Taiwan Semiconductor Manufacturing Co Ltd (TSMC), the world’s largest contract semiconductor maker and a key manufacturer of chips designed by Huawei’s Hisilicon, has halted new orders from Huawei in response to Washington’s new rule change.

Writing about semiconductors and telecommunications.