The U.S. vigorously blocked Huawei and curbed the Chinese technology industry, but Japanese companies benefited

Although the competition between China and the US in the technology industry continues, it is more difficult for US companies to provide related products to assist the development of 5G technology by Huawei and other land-based companies. However, according to foreign media reports, the US ally, Japan, is promoting and profiting from the 5G development in the mainland.

According to a report in the Wall Street Journal, as of the end of this year, mainland China intends to spend $150 billion to deploy 500,000 5G base stations, most of which are from Huawei. Tsuneo Murata, chairman of Murata Manufacturing, a global passive component manufacturer, said that the Beijing authorities are actively promoting the spread of 5G across the continent. With the decline in global consumer electronics demand, the mainland is a very promising market for them.

Huawei was tightened again by the US government in May this year. All companies that want to ship semiconductor products containing US technology to Huawei must be approved by the US government. With China and the United States fighting for technological hegemony and the US government vigorously blocking Huawei, Japan tried to please both sides and avoid stepping on landmines at the same time. But Huawei continues to obtain semiconductor products through non-US companies, which has become a matter of concern for the United States. The global foundry leader TSMC announced that it will set up factories in the United States, and it also confirms that the layout of the US ban on Huawei has been extended overseas.

Although the autonomy of mainland semiconductors is mainly to reduce dependence on the supply chain of US companies and support mainland companies, in fact, it is Japanese companies that have been plowing the mainland market for many years to fill the supply gap of US companies. According to Sho Fukuhara, an analyst at Furui Financial Group in the United States, Japanese and Chinese companies have benefited from the mutually exclusive situation between China and the United States. According to manufacturers, only a 5G base station requires about 15,000 capacitor components, which is a huge benefit for Murata. In the first three months of this year, the orders for capacitors grew by 50% over the same period.

Huawei Chairman Liang Hua claimed in November last year that the company purchased approximately US$10 billion of components from Japan in 2019. Huawei can use this to deliver products to customers without relying on the US supply chain.

Martin Chorzempa, a researcher at the Peterson Institute for International Economics, said that the United States is considering how to make it more difficult for Huawei to obtain products with American technology, but the risk is to beautify the global supply chain. However, the U.S. tightening of the Huawei ban in May left room for some component suppliers to continue selling to Huawei.

Panasonic is currently expanding its production line in Guangzhou and will be able to produce 5G routers and other telecommunications equipment in the plant. Japanese measuring instrument manufacturer Anritsu's operating profit in the last fiscal quarter increased by 75% over the same period, mainly benefited from the strong 5G demand in the mainland and even in Asia. Anritsu said that the current problem is how large the scope of the Huawei ban is, and all companies must look at the regulations clearly this time.