Sanctions to hurt American companies

The tough sanctions imposed on Huawei last week by US President Donald Trump could deal a blow to many US firms that make up the Chinese tech giant’s supply chain.

American firms last year sold an estimated US$11 billion worth of components to Huawei.

Roger Kay, founder and analyst at Endpoint Technologies Associates, said the ban is likely to accelerate efforts by Huawei and other Chinese firms to develop their own sources of microprocessors and other components.

“The longer-term effect is that Huawei and other Chinese companies turn away more sharply from American suppliers,” Kay said.

Avi Greengart, founder of the research firm Techsponential, said a ban on sales to Huawei could hit a wide range of large and small US firms including Corning, which makes the popular Gorilla Glass for smartphones, and Dolby, a producer of video and audio software for handsets.

“When you think about all the software and hardware components you get a pretty big list,” Greengart said.