US Companies Will Be Allowed To Cooperate With HUAWEI In 5G Standard.

In the evening of May 6th, news from the United States said that the US Department of Commerce was about to sign a new regulation allowing us companies to work together with HUAWEI to develop 5G network standards.

Affected by the news, shares of the US semiconductor company rose on the same day, Qualcomm shares rose 1.6% to 78.87 dollars, Intel rose 1.3% to 59.18 dollars, and micron technology rose 1.48% to 46.08 US dollars.

It is worth noting that the 5G standard is being further improved. Gan Jun photo

Entity list affects communication

In fact, HUAWEI has been involved in the formulation of the 5G standard. In fact, the US move is in order to maintain the 5G competitiveness of American companies. Since last year, the US Department of Commerce listed HUAWEI in the "entity list", the cooperation between American enterprises and HUAWEI on 5G standards has been affected, which has damaged the interests of American enterprises.

Gu Wenjun, chief analyst of core research, told the twenty-first Century economic news reporter: "most American companies are in touch with HUAWEI, and there are still many businesses that can do business, including companies like Mei Guang and HUAWEI. At that time, according to the 25% technical restriction rules, some core companies could hardly continue to do business with HUAWEI.

In his view, the US sanctions against HUAWEI should not change much in the next one or two years. "Policy adjustment is tight, but the tone and trend of strict sanctions will not change in a few years."

Reported that after HUAWEI was listed in the US blacklist, some American Technology Corp engineers stopped working with HUAWEI to develop standards. Moreover, the "entity list" also leads us companies to be uncertain about what technologies and information they can share with HUAWEI.

In twenty-first Century, the business reporter of the economic report learned that after the confirmation of the entity list, some American companies and HUAWEI had very limited communication restrictions, and they could not even communicate privately. This also affected the development of standards related businesses.

As we all know, the right to speak in the standard of the first class enterprise is also closely related to the enterprise's profit, and the 5G standard needs to be discussed by the whole world. The silence of American enterprises is obviously not conducive to the struggle for the right to speak and the development of the industry.

So insiders and US government officials say this will make the United States at a disadvantage. Some senior American leaders are pressing for the issuance of new rules. They hope that the United States will not be restricted by the "entity list" in the 5G standard setting.

How can we make American enterprises better participate in the establishment of industry standard organizations? According to reports, the US Department of Commerce has drafted a new rule to solve this problem. People familiar with the matter said that although the rules may still change, they will basically allow American companies to join HUAWEI's standard institutions. The draft is under the final examination of the US Department of Commerce, and it needs approval from other agencies outside the Ministry of Commerce. It is unclear how long the whole process will take, or whether another organization will oppose it.

HUAWEI patent first

It is worth noting that the 5G standard is being further perfected, and the latest R16 standard is about to freeze at the moment, so the current point is also a little tricky. The 5G standard led by 3GPP actually includes three versions of the protocol, namely, R15, R16 and R17. After the three major agreements are completely frozen down, the standard of the three major application scenarios of 5G is complete. At present, only R15 has been frozen in June 2019, mainly for eMBB scenario definition, that is, the optimization of network speed enhancement. R16 and R17 standards will support low latency and wide connect application scenarios, which is the 5G's larger home, and is closely related to vertical industries and industrial applications.

Due to the impact of the global epidemic, the R16 standard has been postponed from March 2020 to June. Even though the main contents of R16 have been determined, the standard of R17 needs to be worked out jointly by various countries, organizations and enterprises. The US enterprises must strive for the advantageous position in the 5G standard. Therefore, if the "entity list" restricts the voice of the US enterprises in the standard, it will also be opposed by the industry.

In 2019, HUAWEI's R & D expenses amounted to 131 billion 700 million yuan (US $18 billion 600 million), accounting for 15.3% of the total sales revenue in 2019, and it is expected to exceed US $20 billion in 2020. At present, HUAWEI has 85000 effective patents in the world, 90% of invention patents, and 3524 patent applications from the European Patent Office.

Recently, German patent data company IPlytics released an investigation report on the 5G standard patent statement. The report shows that as of January 1, 2020, there were 21571 5G standard patent declarations in the world, among which HUAWEI ranked first, with 3147 patent applications for 5G, exceeding Samsung (2795), ZTE (2561), LG Electronics (2300), NOKIA (2149) and Ericsson (1494).

The chief executive of GSMA Greater China, scold, said in a sharing meeting: "it is estimated that China will have a 70% share of global 5G connections in 2020, and the penetration of 5G in China will increase to nearly 50% in 2025, and will become the world leader in this field with Korea, Japan and the United States."

Look at China, R16 will be frozen soon, plus the strong push of the new infrastructure, and the construction of 5G network in China will speed up. This year, operators will vigorously launch the 5G network of SA architecture, and the 5G arms race between big powers will also be more intense. For domestic technology companies such as HUAWEI, no matter what the attitude of the United States is, the interests it will strive for will be striving for, and at the same time, we need to work hard to keep improving and prepare for the long-term challenge of grey rhinoceros in the external environment.

HUAWEI did not comment on this issue until the press release.