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Huawei is turning to software to face US sanctions

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The founder of the Chinese tech giant Huawei, Ren Zhengfei, has called on the company’s employees to dare to lead the world in software as the company seeks to achieve growth beyond the hardware operations that have been hindered by US sanctions.

The internal note represents that I read Reuters has the clearest evidence yet of the company’s direction as it responded to the tremendous pressure from trade sanctions on the mobile phone business that was at its heart.

“The company has been focusing on software because the future development in this area is basically outside the control of the United States and we will have a greater degree of independence,” Chengfei said in the memo.

The note added: Given that it will be difficult for Huawei to produce advanced devices in the short term, it should focus on building software ecosystems, such as HarmonyOS, Mindspore’s cloud artificial intelligence system, and other IT products.

Former US President Donald Trump placed Huawei on the export blacklist in 2019 and blocked it from accessing critical technology of American origin, hindering its ability to design its own chips and source components from outside vendors.

The administration of US President Joe Biden has given no indication that it will lift Trump’s sanctions.

The blacklist also prevented Google from providing technical support for new Huawei phone models and accessing Google’s mobile services (GMS), the suite of developer services on which most Android apps are based.

Huawei’s annual report for 2020 did not say how much its 891.4 billion yuan ($ 138.70 billion) in revenue was from its programs.

The memo also said: The push towards software depends on finding the right business model and that the company should adopt an open source approach, calling on employees to absorb the necessary elements through open source communities.

Chengfei explained that the company’s commercial communications platform Welink relied on traditional software licenses, which were not suitable for cloud computing and were inferior to the product of the technology giant Alibaba.

Given the difficulty of operating in the United States, the memo said: The company should strengthen its position at home and build its territory with the aim of excluding the United States.

She added: If American standards do not match our standards, and we cannot enter the United States, the United States will not be able to enter our lands, once we control Europe, Asia-Pacific and Africa.

The memo confirms an implied trend through previous announcements from the company that hinted at a shift away from phones.

Rotating Chairman Eric Xu said in April that the company is investing more than $ 1 billion this year in the smart leadership business.

Sources told Reuters earlier this month: Huawei is also expanding its smart car partnership with the state-owned Chongqing Changan Automobile Company to include the design and development of semiconductors used in cars.

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