Clean Network Documentary Part 1: 5G Trifecta

Krach’s final step in robbing Huawei of its momentum–the third prong of the 5G Trifecta–was to prevent Huawei from circumventing U.S. export controls by purchasing chips from non-U.S. suppliers like TSMC. Under Krach’s leadership, the State Department partnered again with the Commerce Department to block Huawei’s access to the advanced semiconductors made by foreign firms. This included any chips developed or produced using U.S. software or technology. Huawei needed these chips to produce its 5G equipment and sophisticated smartphones. This move was so successful that Huawei was forced to sell their 5G smartphone business six months later.

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Transcript:
Narrator: News just breaking now on Huawei. Reuters is reporting that the Trump administration will further tighten restrictions on the Chinese company. That report says the Commerce Department will move to prevent Huawei from obtaining semiconductors without a special license. That includes chips made by foreign firms developed or produced using U.S. software or technology. The report says the new actions are aimed at preventing Huawei from circumventing U.S. export controls.

Simone Gao: This is the third prong of the 5G trifecta. By teaming up with the Commerce Department again, the State Department team succeeded in blocking Huawei’s access to advanced semiconductors required for 5G and sophisticated smartphones. It would be so successful that Huawei was forced to sell their smartphone business used with 5G six months later.

Keith Krach: Up to this point, we were just focusing on the U.S. semiconductor companies don’t ship, but they were getting semiconductors, particularly from TSMC and other countries, Samsung. And so we were able to put export controls on those companies because the United States controls the semiconductor machinery, business equipment business and also the design. So that was a way to be able to really loop in everybody. So it really just cut them off for the most sophisticated 5G semiconductors and also for their for their phone business, which was their cash cow. They had to sell their their phone business because they were running out of chips.

Simone Gao: After the initial barrage of the 5G trifecta, Keith Krach and his team initiated a global campaign to build a new alliance of democracies.

Keith Krach: The laws of the jungle have changed. It is about speed. Speed now is the number one currency in business today, and you need momentum for that digital transformation and the big, they no longer need the small. The quick eat the slow. The future of your company depends on it. It depends on action now, not one year from now. And success needs no explanation. Failure needs no alibi. Failure is not an option. It’s go time.