By Dan Strumpf and Eva Dou
Nov. 6, 2019 7:17 am ET
SHENZHEN—Huawei Technologies Co. can survive without the U.S., Chief Executive Ren Zhengfei said, dismissing Washington’s campaign against it as ineffective.
The Chinese telecom giant hasn’t yet received any expressions of interest from U.S. companies to buy the intellectual property underpinning its 5G technology—a workaround floated earlier this year after years of being blocked in the U.S.—but the proposal remains on the table, he added.
In wide-ranging interview with The Wall Street Journal, Huawei’s 75-year-old founder struck a defiant tone on the Trump administration’s recent moves against the company, while also praising the U.S.’s entrepreneurial spirit.
“We can survive very well without the U.S.,” Mr. Ren said. “The China-U.S. trade talks are not something I’m concerned with.”
Mr. Ren said Huawei isn’t a factor in the trade war because “we have virtually no business dealings in the U.S.” He also said “there has been no confrontation with the U.S.” and said he would welcome a visit from Mr. Trump now or after he has left office.
“We would certainly give him a warm welcome,” Mr. Ren said.
In May the U.S. added Huawei to a Commerce Department “entity list,” preventing many American suppliers from doing business with the Shenzhen-based company. Huawei, the world’s largest maker of networking equipment and No. 2 smartphone vendor, has also emerged as a central issue in the trade war, and Beijing has insisted on a reprieve as a condition for any deal.
Huawei, which last year bought $11 billion of technology from American suppliers—including software from Alphabet Inc. and Microsoft Corp. , and chips from an array of manufacturers—has moved to find backup sources, while also working on its own chips and software.
In an interview Wednesday, Huawei founder and CEO Ren Zhengfei struck a defiant tone on the Trump administration’s recent moves against the company. PHOTO: ANTHONY KWAN FOR THE WALL STREET JOURNAL
Huawei executives say the company is building its entire portfolio of 5G networking products without any American technology, at a clip of 5,000 base stations a month.
“We don’t expect the U.S. to remove Huawei from the entity list,” Mr. Ren said. “They may as well keep us there forever because we’ll be fine without them.”
Still, Huawei executives say the company is still buying technology from American companies. Chips made by U.S. companies at factories offshore, for example, generally aren’t subject to the U.S. restrictions, legal experts said. That has allowed several American companies, including chip makers Intel Corp. and Qualcomm Inc., to resume sales to Huawei.
Will Zhang, Huawei’s president of corporate strategy, said in an interview that the purchases of U.S. technology is at 70% to 80% of its previous level.
The blacklisting was one of numerous anti-Huawei actions in the past year by Washington, which regards it as a security threat. U.S. officials have pressed allies to keep Huawei out of their 5G networks, and last December in Vancouver, Canadian authorities arrested Mr. Ren’s daughter— Meng Wanzhou, who is also Huawei’s CFO—at U.S. behest.
Huawei nonetheless continues to win 5G contracts around the world, while its smartphone sales are booming—particularly in China—despite uncertainty over its continued access to Google’s Android operating system. Mr. Ren initially forecast a $30 billion revenue hit from the blacklisting this year and next, but the company has said revenue for the first nine months of the year was up 24%.
Mr. Ren first made his 5G offer to the U.S. earlier this year as a way to help it catch up, while raising money to fund research and development, for which Huawei budged about $14.5 billion last year. The U.S. has no large vendor of cellular networking equipment of its own. Huawei’s main rivals in that sector are Sweden’s Ericsson AB and Finland’s Nokia Corp.
“We are completely sincere in our offer to license our 5G technology to the U.S.,” Mr. Ren said. He said the U.S. could “overtake Huawei” in three years.
The U.S. defends its actions against Huawei by citing concerns that Beijing could use its equipment for spying. It also says Huawei would be legally bound to comply with requests for customer data from Beijing.
Asked if Huawei could be sure that none of its nearly 200,000 employees around the world engage in espionage on behalf of a government, Mr. Ren pointed to the company’s compliance guidelines.
“We don’t allow for violations,” he said. “If there were any employees that did such a thing, they would be severely punished.”
Insisting Huawei has no access to the data that flows through it networks, Mr. Ren argued by analogy.
“Just like automobile manufacturers, we only sell equipment,” he said, adding, “Carriers build pipes and ensure information flows smoothly through the pipes, while we produce the iron sheets on top of the pipes. What could we do with iron sheets?”