China Tech

Huawei's parts from Japan firms to be worth $10 billion in 2019

22, Nov. 2019

TOKYO, Kyodo - Huawei Technologies Co. Chairman Liang Hua said Thursday that parts procured from Japanese companies are set to total 1.1 trillion yen ($10 billion) in 2019, as he expressed hope of boosting ties with them while being blacklisted by the United States.

The figure represents more than a 50 percent jump from the previous year. Japanese manufacturers have “various strengths” in components and materials used in telecommunication base stations and smartphones, Liang said in a group media interview in Tokyo.

Huawei and Japanese companies are in a “mutually complementary relationship,” he said, expressing a desire to increase cooperation in developing next-generation technologies.

He said Huawei expects to see further growth in parts procurement from Japanese firms in 2020. For the first nine months through September this year, total parts procurement from Japan has already reached 780 billion yen, according to Huawei.

Huawei unveiled earlier Thursday a report on its economic impact on Japan, which said the company brought Japan 766 billion yen in economic benefits in 2018, up from 500 billion yen the previous year.

The report, compiled by Oxford Economics, which provides economic forecasts and analysis, also said Huawei directly and indirectly through its supply chain created a total of 46,400 jobs in 2018, up from 29,200 the previous year.

Huawei's businesses in Japan generated 208 billion yen in tax revenues, up from 136 billion yen in 2017, the report said.

Huawei, a leader in next-generation wireless networks known as 5G, was effectively banned from conducting business with U.S. companies in May over national security concerns. It is suspected that Huawei's equipment could be used for cyberespionage, an allegation that the company denies.

Reflecting U.S. concerns, the Japanese government has also decided to effectively exclude Huawei from public procurement.

Japan's three major mobile phone carriers are expected not to adopt Huawei products for next-generation 5G mobile communications networks.

In the interview, Liang stressed Huawei “will sell anytime” its 5G technology if there is such a request by the Japanese side, adding that it can also sell its products using Japanese companies' components in markets across the world.

Over the U.S. administration's continued implementation of sanctions, Liang said, “Free trade is an irreversible trend. The world will not be divided.”

“We can continue our operations even without buying supplies from U.S. companies” through alternative procurement, Liang said.

On Wednesday, the U.S. Commerce Department eased some of the restrictions imposed on Huawei, authorizing some companies to sell goods to Huawei on the grounds that the sales do not pose national security risks.

“We welcome the approval. We are happy to continue cooperation with U.S. companies,” Liang said. (Kyodo)

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