US To Spend $1.5 Billion To Jumpstart Alternatives To Huawei (axios.com) 48
The federal government plans to invest $1.5 billion to help spur a standards-based alternative for the gear at the heart of modern cellular networks. From a report: Experts say -- and the government agrees -- that there are economic and national security risks in having such equipment made only by a handful of companies overseas, with the most affordable products coming from China's Huawei. The most likely effort to benefit from the new funding is known as ORAN (Open Radio Access Network), which uses standard computing gear to replace what has been proprietary hardware from companies like Nokia, Ericsson and Huawei. The federal government is kicking off the program with a public comment period, which will run through Jan. 23. Funding for the effort was provided by the Chips and Science Act. The U.S. has largely banned use of Huawei's devices over security concerns amid deepening U.S.-China tensions.
...and then they will get the chips made in China (Score:1)
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Chips and Science Act [wikipedia.org]
Intel, TSMC, Samsung, Micron have all announced new fabs and expansion of existing fabs, I think the commited number for investment so far is getting into the hundreds of billions.
https://investors.micron.com/n... [micron.com]
https://www.cnbc.com/2022/12/0... [cnbc.com]
https://www.intel.com/content/... [intel.com]
https://www.globest.com/2022/0... [globest.com]
Re: ...and then they will get the chips made in Ch (Score:1)
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Forget the new technology until you have a manufacturing base.
Taiwan can fab the chips, and Vietnam can assemble the devices. Neither is a geopolitical rival to America.
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Taiwan announced plans to build a new state of the art fab in Arizona.
I think they are looking to move production to the US in case China decides to invade.
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Pork, pork, pork (Score:5, Informative)
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No lie detected. Intel has enough cash on hand to build a new fab, literally... The whole act is ridiculous
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But if it's cheaper to make chips in China, they have no financial incentive to do otherwise. In fact, as a publicly traded company they have a responsibility to the shareholders not to move manufacturing. If the government doesn't change the financial incentives, it won't happen.
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Tarrifs are far less effective than bilaterial trade agreements that include provisions for participating nations to improve labor conditions and wages (something the TPP, despite it's issues, actually included) and subsidies and tax incentives.
We had 4 years of tarrifs under the Trump admin, tarrifs that pretty much have continued under Biden and the Chips act has spurred more investment in this single year than all those tarrifs did.
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We had 4 years of tarrifs under the Trump admin, tarrifs that pretty much have continued under Biden and the Chips act has spurred more investment in this single year than all those tarrifs did
There are a few reasons they weren't as effective as they could have been. We had COVID delay building anything new. Next, China just put a different stamp on their products and used Vietnam as a middleman. There may be others as well. My proposal above works when China tries to cheat and against cheap labor. Oh, and finally they did work. The tariffs didn't target consumer goods, but I read countless complaints from people working for companies who were complaining that product xyz they rely on cost them m
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I think maybe it's a matter of goals, I think tarriffs can be useful as more of an economic sanctions, like some tariffs against China where it employs certain tactics can work as part of a broad sanction strategy. I think they should be targeted because broad tariffs can end up hurting the targeting countries industries as well.
As a counterexample though the export control order enacted this year's looks to have hurt China's semiconductor industry more than tariffs have,with a reported exodus of engineers.
Re:Pork, pork, pork (Score:4, Insightful)
The headline should read "US Government To Hand $1.5 Billion of Taxpayer Money To Large US Telco Equipment Vendors", which is what's really taking place here. A billion or two for Qualcomm, a billion or two for Cisco (because it always overshoots the initial amount), and we have several congresscritters due to retire who'd like a seat on the board with $10 million a year in remuneration, thankyou.
True, here's another one: "Billionaire libertarian winners of the greatest meritocracy in the universe need taxpayer subsidies to compete with communist company Huawei." Because taxation is violent robbery and subsidies are an anathema except to any Libertarian when it is Libertarians that are getting billions in taxpayer subsidies to help them pull themselves up by their bootstraps and win the meritocracy so they can later give Ted talks about how they made their fortune by nothing but the sweat of their own brow with no help from anybody.
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"Billionaire libertarian winners of the greatest meritocracy in the universe need taxpayer subsidies to compete with communist company Huawei."
Pretty sure there isn't really such a thing as a "communist company." I think that might be a contradiction in terms. There *is* a socialist-adjacent economic/political system that involves tight integration of corporations and the state. It ain't capitalism....
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A commune is essentially a company. I expect all the ones in the US are actual corporations, it would be pretty tricky to do it any other way.
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In 2021 Huawei spent over $4bn on R&D.
The US government really needs to look at the long term strategy here. Companies seem to think they can just not bother innovating and then go whining to the government when Huawei beats them to it, and so far that has been working for them.
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In the US a great deal of money is wasted getting services to rural areas, particularly those that require physical connections. Wires, roads, etc.
In other countries mobile is more advanced because the money was never spent on wires. Mobile is the solution that jumpstarted many from the 19th to 21st century. Many of my acquaintances never had a home landline phone. It was too expensive. They went to the central phone office.
In the US I can ima
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Not to mention they now have a captive market that has to rip out all their Huawei stuff and replace it.
Time to buy Cisco stock.
What makes Huawei cheap? (Score:2)
Let's think about what makes Huawei cheap.
1. Supply chain
2. Low labor cost
3. Copied intellectual property
This $1.5B will do nothing to address the first two things that make Huawei cheap.
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Labour cost is a very small part of it. Huawei still spends the equivalent of billions of USD on R&D.
Manufacturing in China increasingly relies on volume, as wages go up.
Huawei is simply willing to sell at a lower price. They needed to make inroads into Western markets, and offer a price that was affordable in developing countries. Now governments are trying to lock them out of Western markets there is loads of cheap used Huawei gear flooding the market too.
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And yet they were still out-innovated.
Re: What makes Huawei cheap? (Score:2)
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Yep, you nailed it. The Chinese are beating us at capitalism, so we need to combat it with socialism!
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I don't think you understand how much the supply chain helps.
Re:What makes Huawei cheap? (Score:4, Interesting)
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I hate to say it but OSH Park are getting out-innovated here. They do basic PCBs, any colour other than green costs extra, and things like more than 4 layers or gold finish are pretty pricey. They don't offer any assembly. Do they offer stencils? The Chinese offer things like letting you review the manufacturing data before it is sent to the factory too.
With Chinese companies with one order you can get an assembled PCB, programmed microcontroller, and 3D printed enclosure. They will source the parts for you
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I guess their website undersells it then, but that's good if they offer high quality as default. You get tabs on the Chinese ones as well, unless they get removed during assembly. You can do your own panelization if you like.
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Some Chinese companies are hilarious though. One of them had a PCB tracking program that monitored every single step of the production process so you could see precisely where your PCB was up to and it was timestamped to the second. It was provided estimates for end production (again to the second). .... And then proceeded to miss the target by 8 hours, which doesn't sound bad except that this was 50% of the entire production process estimation. :-)
But yeah significantly cheaper than OSH Park, fast turnarou
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Huawei is cheap because their 5G network hardware is artificially subsidized by the Chinese government. It would be relatively cheap anyway, like all their stuff is cheap including their smartphones, due to the factors you list; but for this specific thing (5G network hardware), the CCP spent government money so Huawei could sell at a loss to make sure they were significantly cheaper than _anybody_ else, because they specifically wanted all the world's cellula
You know what this reminds me of? (Score:4, Interesting)
A heavily subsidized company set up to compete with a foreign competitor... If I didn't know better, I'd swear this is a very communist state intervention right there. You know, like in China.
But this is the US, so it can only be capitalism, where companies make it on their own without any help from the government - unless they can't.
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unless they can't.
Or unless the government is the market where favours can be bought.
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I'd swear this is a very communist state intervention right there. You know, like in China.
It's sad that you don't know any better. I highly suggest you look up the word "socialism" rather than trying to use the word "communist" to describe anything, and that includes China which doesn't resemble communism any more than Russia resembles a democracy.
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A heavily subsidized company set up to compete with a foreign competitor... If I didn't know better, I'd swear this is a very communist state intervention right there. You know, like in China.
But this is the US, so it can only be capitalism, where companies make it on their own without any help from the government - unless they can't.
It's definitely not ideal but communications gear from China is a very legitimate security concern to the west.
Also consider that Huawei was built with the backing of the Chinese government and with the likely help of government hackers to steal IP and kill competitors [nationalpost.com].
This is one of those instances where, for the purposes of national security, you do need to build a local supplier. And if you need a bit of extra funds to offset the assistance Huawei receives from the Chinese government so be it.
Start a company to build towers, so they can die (Score:2)
Turnabout (Score:1)
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Costs a lot more than that (Score:2)
To build a millimeter wave MIMO 64x64 antennae array, Apple and maybe SpaceLink are the only American organizations equipped to verify their hardware. Apple spent over a billion USD to build their facilities for developing antennes and that was long before 5G or even LTE. Today, a budget version of such a device would be at least double. I have no idea what SpaceLink did, but their antennae tech is decades ahead of anything else I'v
How much did Qualcomm pay to remove their name? (Score:2)
It's helpful for the REASON for doing something to be CONNECTED to your evidence. Huawei doesn't invent technology for phones, then extract value from all other phone manufacturers. They rely on slave labor. Like Apple. We already have one of those.
First then what? (Score:2)
Let's throw out the old first and then start thinking about the new!
Or was it the other way around?
Wait, i'm so confused...