Huawei Pauses Its Orders From Japanese Supplier Due To Meng’s Arrest

Dhir Acharya - Dec 14, 2018


Huawei Pauses Its Orders From Japanese Supplier Due To Meng’s Arrest

After the arrest of Huawei CFO, the company has put all orders in its Japanese supplier on hold.

One of Huawei’s Japanese supplier is about to suffer from the arrest of Huawei’s CFO.

On Wednesday, Hiroshi Ogasawara, President of Yaskawa Electric replied in an interview that Huawei has frozen all of its order in this company. Yaskawa supplies industrial robots to Huawei’s factories for making phones and telecom gears. When the fiscal year ended in February, reports indicate that China made up 23 percent of total Yaskawa’s annual revenue of S4 billion.

Kết quả hình ảnh cho Yaskawa Electric company

Yaskawa Electric

Ogasawara said that his employees in China claimed Huawei is turned upside down internally and they are trying to sort things out, hence the orders put on hold.

Due to this news, the stock price of Yaskawa reduced by 4 percent, other factories also suffer from a slight fall in share price including SMC Corp., Nabtesco Corp., and Fanuc Corp.

Back in October, Yaskawa expected memory chip producers to begin investing in 5G in spring and hoped to witness a significant increase in machinery orders by early next year. That doesn’t sound likely anymore because of the recent events.

Plus, Yaskawa runs three plants in China that manufacture machines for domestic clients.

A spokesman from Huawei said the decisions on gear purchases are made months ahead. In his email, the spokesman explained that Huawei made the decisions relating to the purchase of this equipment a few months ago. Huawei cannot influence other suppliers’ decisions, including those they have outsourcing deals.

According to Ogasawara, the incident of Huawei and trade tensions between China and the US will not affect the launch of 5G in China since it’s the government policy. And domestic demand is likely to make up for the losses due to trade barriers.

Kết quả hình ảnh cho Hiroshi Ogasawara

Hiroshi Ogasawara, President of Yaskawa Electric

Early December, Huawei CFO Meng Wanzhou was arrested in Canada, following the US authorities’ request. Meng was accused of getting involved in selling products to Iran, which evaded US trade sanctions against the country. While Meng’s arrest has got international attention, it’s the first incident to affect Huawei’s operation.

The incident has also added to the West’s suspicion of the company’s ties with the Chinese government and military.

FYI, earlier this week, it was reported by the Japanese media that KDDI Corp., SoftBank Group Corp., and NTT Docomo will issue bans on telecommunications devices from ZTE and Huawei. Orange SA in France claimed it has no plans to partner with Huawei in building its 5G network.

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