Business / Corporate

Parts bought by Huawei from Japan firms valued at ¥1.1 trillion in 2019

Kyodo

Huawei Technologies Co. Chairman Liang Hua said Thursday that parts procured from Japanese companies are set to total ¥1.1 trillion ($10 billion) in 2019, also expressing hope to boost ties with them while the firm remains blacklisted by the United States.

The figure represents more than a 50 percent jump from the previous year. Japanese manufacturers have “various strengths” in components and materials used in telecommunication base stations and smartphones, Liang said in a group media interview in Tokyo.

Huawei and Japanese companies are in a “mutually complementary relationship,” he said, expressing a desire to increase cooperation in developing next-generation technologies.

He said Huawei expects to see further growth in parts procurement from Japanese firms in 2020. For the first nine months through September this year, total parts procurement from Japan has already reached ¥780 billion, according to Huawei.

Earlier Thursday, Huawei unveiled a report on its economic impact on Japan that said the company had brought Japan ¥766 billion in economic benefits in 2018 — up from ¥500 billion the previous year.

The report, compiled by Oxford Economics, also said Huawei had directly and indirectly created a total of 46,400 jobs in 2018 through its supply chain, up from 29,200 the previous year.

Huawei’s businesses in Japan generated ¥208 billion in tax revenue, up from ¥136 billion in 2017, the report said.

Huawei, a leader in next-generation wireless networks known as 5G, was effectively banned from conducting business with U.S. companies in May over national security concerns. It is suspected that Huawei’s equipment could be used for cyberespionage, an allegation that the company denies.

Reflecting U.S. concerns, the Japanese government has also decided to effectively exclude Huawei from public procurement.

Japan’s three major mobile phone carriers are expected not to use Huawei products for next-generation 5G mobile communications networks.

In the interview, Liang stressed that Huawei “will sell, anytime” its 5G technology if it receives such a request from Japan, adding that it can also sell its products using Japanese companies’ components in markets across the world.

Regarding the U.S. administration’s continued sanctions, Liang said, “Free trade is an irreversible trend. The world will not be divided.”

“We can continue our operations even without buying supplies from U.S. companies,” through alternative procurement, Liang said.

On Wednesday the U.S. Commerce Department eased some of the restrictions imposed on Huawei, authorizing some companies to sell goods to Huawei on the grounds that the sales do not pose national security risks.

“We welcome the approval. We are happy to continue cooperation with U.S. companies,” Liang said.