|Tech Players Confront Long List of Challenges in U.S.-China Trade Fight|
At the WSJ Tech D.Live conference, top investors and company leaders emphasize how unpredictable the global economy has become
By Timothy W. Martin
June 14, 2019 8:54 a.m. ET
HONG KONG—The U.S.-China feud is challenging the technology industry in areas including financial deals, supply chain and talent recruitment, though some players are finding bright spots, executives said on Friday.
At The Wall Street Journal’s WSJ Tech D.Live conference, top investors and company leaders in the industry emphasized how unpredictable the global economy has become as Washington and Beijing battle over trade and technological dominance.
“Quite frankly, right now the list of things to be very worried about is long—longer than it’s actually ever been in my career,” said Jennifer Nason, global chairman of investment banking at JPMorgan Chase & Co. “Some of it is pretty scary stuff.” She said the uncertainty has made it trickier for some company boards to feel confident about taking on big deals.
The U.S. last month put Huawei Technologies Co. on a trade blacklist that bars sales of components to China’s leading producer of smartphones and telecom equipment without a Commerce Department license. That move has created pain for some tech suppliers, including Micron Technology Inc., one of the world’s largest makers of memory chips.
Huawei is one of Micron’s biggest customers, and the U.S. action against the Chinese company has brought uncertainty and some turbulence to the semiconductor industry, Micron Chief Executive Sanjay Mehrotra said at Friday’s conference.
The Boise, Idaho-based company is conducting a legal review of what can or can’t be shipped to Huawei, Mr. Mehrotra said. He didn’t specify the financial impact of the export ban, saying he would do so later this month on Micron’s earnings call.
“We will always focus on following the laws and regulations,” Mr. Mehrotra said. “However, there are details to be pursued and to be studied. That’s what our team continues to do.”
Another U.S. chip company, Broadcom Inc., said Thursday that it would make $2 billion less in annual sales than expected as a result of Washington’s export restrictions on Huawei, news that sent shares in Broadcom and other chip companies lower.
Kyum Kim, co-founder and head of U.S. operations for Teamblind, said the trade fight hasn’t directly affected the South Korean startup. But the battle has colored discussions on its anonymous forums.
In a recent survey of its users, Chinese citizens reported that they felt threatened by the trade dispute. “Chinese nationals were actually feeling threatened by the trade war, especially in hardware companies like Qualcomm , ” Mr. Kim said.
Others are seeing some new opportunities despite the cloud created by the U.S.-China fight—or even because of it.
The tensions are benefiting China in that tech professionals and investment that might have gone from China to the U.S. is returning home, said Ben Harburg, managing director of MSA Capital. “There’s a lot more talent coming to China now that would’ve stuck around the U.S. previously,” he said.
One Chinese tech company doing well in the U.S. despite the bilateral strains is Bytedance Ltd., whose TikTok video app has soared in popularity among American users.
Jared Grusd, chief strategy officer at social-networking company Snap Inc. said Bytedance is one of the first China-based companies to scale its consumer platform in the U.S. and other parts of the world. “Their ability to chime consumer awareness outside of its core market is really interesting,” he said.
Smartphone sales have cooled as consumer spending pulled back because of global economic concerns over Beijing and Washington’s protracted trade disagreement. But Samsung Electronics Co. saw strong initial demand for its 5G-enabled handset, an optimistic sign for the next-generation mobile network.
Samsung started selling a 5G variant of its Galaxy S10 phone in April in South Korea.
“The initial response we got was overwhelming,” said Junehee Lee, who heads Samsung’s technology strategy team. “It’s surpassing any expectations we may have had.”
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