The Wall Street Journal

Huawei's Chinese Phones Are Also American

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The U.S. blacklisting of Huawei is cutting off American businesses from a big client. WSJ's Dan Strumpf looks at the American technology that has powered the Chinese company's smartphones. Photo composite: Sharon Shi


Since 1952, every major party presidential nominee have given a televised concession speech. Until 2020.
President Trump has the COVID-19 relief bill in Florida but it is not clear if he will sign it or veto it. Unemployment benefits will run out for millions of Americans on Saturday as pandemic-related programs are also set to expire. CBSN political contributor and Associated Press White House reporter Zeke Miller joins CBSN with the latest.
Doctors are urging Americans to get the coronavirus vaccine. Dr. Ruth Karron, the director of the Center for Immunization Research at Johns Hopkins University, joins CBSN's Lana Zak to answer questions about the COVID-19 vaccine and its efficacy. She also discusses the differences between the new strains overseas and how much of a concern they are.

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There's a lot of buzz around self-driving cars, but autonomous-driving technology could revolutionize a different industry first — construction. That industry hasn't changed much over the last several decades, according to some experts, making it an ideal candidate for automation.

"The way we build today is largely unchanged from the way we used to build 50 years ago," said Gaurav Kikani, vice president of Built Robotics. "Within two years, I think we're really going to turn the corner, and you're going to see an explosion of robotics being used on construction sites."

The industry is also faced with a labor shortage that the Covid-19 pandemic has further complicated.

"Covid is making people step back and say, ‘hey, the way we've been doing things for a long time is just not sustainable,'" said Kevin Albert, founder and CEO of Canvas. "It is just a wake-up call for the industry."

Canvas is one of several companies working on autonomous construction technology. Big players like Caterpillar and Komatsu, and start-ups like SafeAI and Built Robotics, see value in using autonomous machines to accelerate construction projects.

The mining industry was one of the first to employ the use of self-driving tech. Caterpillar began its first autonomy program more than 30 years ago. The company now has the largest fleet of autonomous haul trucks. Caterpillar says it's hauled 2 billion metric tons in just over six years.

Built Robotics is a San Francisco-based start-up founded by an ex-Google engineer that already has machinery out in the field. It's automated several pieces of equipment, such as bulldozers and excavators.

"You can now collapse your construction timeline so you can knock out work overnight so that it's ready for your human workers in the morning to speed them along," Kikani said.

SafeAI is another Silicon Valley start-up. It recently teamed up with Obayashi for a pilot program. It's been retrofitting equipment like dump trucks, bulldozers and loaders.

Robots are also helping inside. San Francisco-based Canvas created an autonomous machine for finishing drywall and has worked on projects like the San Francisco International Airport and Chase Arena. Humans work alongside its robotic system.

"Drywall is very hard work on the body," Albert said. "And we've seen that 1 out of every 4 workers has to end their career early because of injuries. This will create longer careers for people and also enable people to join the trades that haven't had access before."

The construction industry is one of the largest sectors in the global economy, with about $10 trillion spent each year. That spending accounts for 13% of the world's GDP, even though the sector's annual productivity growth has only increased 1% over the past 20 years. According to McKinsey & Co., $1.6 trillion of additional value could be created through higher productivity, and autonomy would help the industry achieve that.

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- If you wanna buy a cellphone in Asia,
you might come to a smartphone center like this one
here in Hong Kong.
You'll notice that Huawei is everywhere.
The Chinese company is the world's second biggest
seller of smartphones.
And although its devices aren't that common in the US,
they're actually very American.
This new model which the company lent me for this video,
contains software and parts that would be familiar
to any American smartphone user.
It comes with Google Maps, so I know where I'm going.
(bell rings)
I use Gmail to catch up on messages.
The scratch-proof screen is even made in the US.
But soon, these features and software could become
unavailable for millions of Huawei users
and that's because of a US Commerce Department blacklisting
that prevents American companies from selling it technology.
Huawei has been accused by the US government
of being a national security threat,
which Huawei denies.
- Huawei is an instrument of the Chinese government.
- The Trump administration has said that Huawei
could help the Chinese government spy using
its products including 5G equipment
and smartphones like this one.
This means that if the ban remains in place,
American tech companies won't be allowed to export
crucial hardware and software to Huawei.
That's everything from semiconductors to proprietary apps.
Out of $70 billion that Huawei spent on procurement in 2018,
about 11 billion was to US firms
including Qualcomm, Intel and Micron Technology.
Huawei also says it has 92 core suppliers,
33 of them are US companies outnumbering China's 25.
So although the exact impact on US companies
from this ban will be hard to predict,
we do know that the American companies will be feeling
the Chinese company's pain from this trade blockade.
Now let's have a look inside this phone
and see which American components go in it.
First, let's look at the software.
These are the apps and services
that people rely on everyday.
Huawei doesn't have its own operating system,.
So far its go-to has been Google's Android.
The suite of apps like Google Maps, Gmail and YouTube
have helped make Huawei smartphones globally popular.
But now with the US restriction,
future models of Huawei phones,
won't automatically have those apps installed.
Users of Google Maps and Gmail will have
to find open source alternatives.
Huawei will also lose access to some security updates
from Google after a 90-day grace period.
Potentially exposing them to software and threats.
There are thousands of little parts that make up one phone.
Again, many are made in the US.
Corning makes the phone's shiny glass body
called Gorilla Glass.
It gives Huawei smartphones that tough exterior.
It's also a popular brand among other smartphone makers.
Now, look inside.
The printed circuit board is like the brain.
It's an essential part of any electronic device
housing many of the most important components on the phone.
These are the audio amplifiers.
And they are made by the Texas company Cirrus Logic.
They make sure you get a loud and clear audio signal
when you're listening to music or receiving a call.
Massachusetts-based company Skyworks makes
the phone's power amplifier.
It's crucial for keeping your phone connected
to your carriers network so you can make calls
or stream your favorite show.
Every phone needs a robust storage chip
for your selfies and videos.
Huawei's latest model uses a chip
from the Idaho-based company Micron Technology.
There are plenty of other critical parts
that are made in the US, but the Chinese circuit board
also has components from Japan, France,
Germany and of course China.
For decades, globalization has pushed companies
to do business across borders.
This phone is just one example of how many companies
are now caught up in the US actions against Huawei.
And how unpredictable doing business
in the global supply chain can be.
We reached out to these companies for comment.
Google said it's complying with the order
and reviewing the implications.
Skyworks told us it's suspended shipments to Huawei.
Micron said it's done the same and it's also evaluating
the impact on its business.
Others didn't respond to our requests.
Huawei has been under fire from the US government
for a while now and the company has been stockpiling parts.
Even building its own operating system to replace Android.
While Huawei may be able to cope by finding substitutes
for its US components, it'll come at a cost.
Likely in the form of hardware and software
that's just not as good.
The ones who notice the difference
will be the millions of users of Huawei phones.
(soft music)

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