The UK Will Now Eliminate Huawei From Its 5G Networks

The Conservative government in London has changed course and will now ban Huawei from its 5G networks by 2027, but this might not be enough to head off a challenge from those in the party who want a stronger line. The British government claimed a US regulatory change has made using Huawei impracticable.

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Prime Minister Boris Johnson has reversed the United Kingdom’s (UK) course on Huawei equipment in its 5G networks and instead of limiting the percentage of the UK’s next generation telecommunications network that would consist of Huawei to 35%, now Downing Street is proposing to eliminate the Chinese company entirely. While Johnson’s government is essentially blaming a United States Department of Commerce rule aiming to cut off the flow of semiconductors to Huawei, it is likely the position of a number of Conservative Ministers of Parliament (MP) who were planning to oppose Johnson’s original plan informed the revised path. And much to the chagrin of this bloc of 60 or so Tory MPs, Johnson’s government is not calling for the removal of Huawei equipment from existing 2G, 3G, and 4G networks, a proposal British telecommunications companies have opposed. Consequently, Conservative MPs may try to change the coming telecommunication bill to institute the new Huawei ban to apply it to existing equipment, and they may have the votes to do so, forcing the Prime Minister to risk a defeat on the floor of the House of Commons or change his package further ahead of consideration.

Johnson had floated the notion that a so-called G10 group of nations could pool resources and develop alternative means of achieving 5G other than buying from Huawei, one of the People’s Republic of China (PRC) companies the United States has been pressuring allies and others not to buy from. It is not clear whether Johnson will try to pursue this other strategy with the new change in course.

Digital, Culture, Media and Sport Secretary Oliver Dowden made a “statement on telecoms” earlier today in the House of Commons, explaining the government’s change in plans regarding Huawei in particular. Dowden stated:

  • In January, we set out to this House our conclusions on how we would define and restrict high risk vendors, keeping them outside the network’s core and away from critical infrastructure and sites.
  • We have been clear-eyed from the start that the Chinese-owned vendors Huawei and ZTE were deemed to be high risk.
  • And we made clear that the National Cyber Security Centre (NCSC) would review and update its advice as necessary.

He declared that “[s]ince January the situation has changed.” He added that “[o]n the 15th of May the US Department of Commerce announced that new sanctions had been imposed against Huawei through changes to the foreign direct product rules…a significant, material change – and one that we have to take into consideration.”

Dowden claimed

  • This morning, the Prime Minister chaired a meeting of the National Security Council. Attendees at that meeting took full account of the NCSC’s advice, together with the implications for UK industry and wider geostrategic considerations.
  • The government agrees with the NCSC’s advice: the best way to secure our networks is for operators to stop using new affected Huawei equipment to build the UK’s future 5G networks.
  • So to be clear, from the end of this year, telecoms operators must not buy any 5G equipment from Huawei. And once the Telecoms Security Bill is passed it will be illegal for them to do so.

Dowden continued

I know that Honourable Members have sought a commitment from the government to remove Huawei equipment from our 5G network altogether. This is why we have concluded that it is necessary and prudent to commit to a timetable for the removal of Huawei equipment from our 5G network by 2027. Let me be clear. This requirement will be set out in law by the Telecoms Security Bill. By the time of the next election, we will have implemented in law an irreversible path for the complete removal of Huawei equipment from our 5G networks.

Dowden explained that “one of the reasons we are in this situation is because of global market failure…[and] [p]ut simply, countries around the world, not just in the UK, have become dangerously reliant on too few vendors.” He stated that “[w]e have already set out a clear and ambitious diversification strategy…[and] [t]hat strategy will include wide-ranging action in the short, medium and long-term with the aim of driving competition and innovation to grow the market and deliver greater resilience across our networks.” Dowden stated “[t]]he strategy will focus on three core elements:

  • First – securing the supply chains of our incumbent, non high risk suppliers by putting in place measures and mitigations that will protect supply chains and ensure there is no disruption to our networks.
  • Second – bringing new scale vendors into the UK market by removing barriers to entry, providing commercial incentives and creating large scale opportunities for new vendors to enter the UK market.
  • And third – addressing the existing structure of the supply market by investing in research and development and building partnerships between operators and vendors that will mean operators using multiple vendors in a single network will become the standard across the industry.

In a blog post and a summary, the NCSC explained in much more detail its analysis of the risks of using Huawei’s equipment, which derive mostly from the implications of US action and less from inherent risks.

NCSC Technical Director Dr Ian Levy explained “[i]n May, the US changed a subtle and detailed export control rule called the ‘Foreign-Produced Direct Product Rule’ (FDPR).” He added that “[t]he amended rule says that no-one, anywhere in the world, can send Huawei-designed chips to Huawei if US technology was used in the design tools or manufacture processes…[and] [t]his doesn’t just mean that Huawei can’t use design tools that contain US technology…[i]t also means:

  • no-one else can take a Huawei design and turn it into chip manufacture instructions (usually something called a GDS2) using tools that contain US technology
  • even if you’ve already got the GDS2 for a Huawei chip, you can’t actually turn it into a chip if your foundry process uses US technology (and for modern process nodes, US technology is pretty pervasive) or if the GDS2 was produced using US technology

Levy stated

The FDPR change wasn’t in effect in January. It is now, and that’s a material change to the facts on the ground that has led us to revisit our analysis. The NCSC now believes that there are only three things that can happen to help Huawei in response to this action. In our recent consultations with them, Huawei haven’t disagreed with this analysis. Those options are:

  1. Someone breaks US law and continue to manufacture. This is pretty unlikely. Huawei have always publicly said that they’ll follow applicable law, but the impact on any design house or foundry that went this way would be huge. Also – given there’d be a reasonable expectation that the chips broke US law – any organisation buying the equipment would be taking a significant risk.
  2. Huawei switch chips in equipment designs to ones that aren’t Huawei-designed, but perform the same sort of function. This is a big task. Assuming you can find someone to design a chip that’s near enough to the original, the integration into the wider product is a very complex job. This can’t be a direct replacement for a Huawei-designed chip, because then at least some of the design will be Huawei’s, and so likely caught by the rule. This is a really complex engineering task. And given Huawei’s continued lack of security or engineering quality as described in the Oversight Board reports, this is highly likely to introduce security and reliability problems into the equipment for the next few years at least.
  3. Someone makes new design tools and manufacturing processes for chips that don’t use any US technology and so can provide Huawei what they need. Good luck doing that quickly. You need to invent some new ways of doing really complex things (extreme UV lithography, multi-patterning etc.) while being bound by the laws of physics. The precise mechanisms the foundry uses to make these tiny transistors dictate the design rules your EDA tools have to enforce. As a cartoon example, if the foundry process produces some fuzziness around the edges of transistors, your design tool will need to leave more space between them, or the performance of the chip could be affected. The performance and capability of your EDA tools dictate what the foundry can build reliably. If your EDA tools can’t do lots of Maxwell’s equation solving, you’ll need to route wires differently round the chip and simplify your design. You don’t need to understand how a FinFET works or what a hi-K dielectric is to know that’s a ton of work that’s likely to fail a few times.

Levy explained “[t]oday, we are publishing guidance, supported by government, as to what this all means for the future telecoms network builds and to help operators understand the impacts of this decision…[and] [t]he guidance says that:

  • existing Huawei equipment in the UK can continue to be used, subject to the HRV policy and our mitigation strategy
  • operators need to procure enough spares to maintain the equipment for the expected lifetime
  • operators should seek to cease procuring and deploying Huawei 5G access equipment, all transport equipment, and other miscellany to manage the long-term risks of the newly designed products (practically, procurements are likely to cease by the end of 2020)
  • operators should seek to cease procuring and deploying Huawei FTTP (Fibre to the Premises) access equipment. It may take a bit longer for rollouts to cease in this case, so the Department for Digital, Culture, Media & Sport (DCMS) are going to work with industry to establish a manageable timeframe

In mid-May, the Department of Commerce’s Bureau of Industry and Security (BIS) “announced plans to protect U.S. national security by restricting Huawei’s ability to use U.S. technology and software to design and manufacture its semiconductors abroad” per the agency’s press release. BIS released an interim final rule that takes effect as of 15 May, but the agency is accepting comments through 14 July, meaning there will be a final rule issued at some point in the future once the comments have been analyzed and addressed. Nevertheless, Commerce claimed the BIS interim final rule “cuts off Huawei’s efforts to undermine U.S. export controls.”

Commerce stated

  • BIS is amending its longstanding foreign-produced direct product rule and the Entity List to narrowly and strategically target Huawei’s acquisition of semiconductors that are the direct product of certain U.S. software and technology.
  • Since 2019 when BIS added Huawei Technologies and 114 of its overseas-related affiliates to the Entity List, companies wishing to export U.S. items were required to obtain a license.[1]  However, Huawei has continued to use U.S. software and technology to design semiconductors, undermining the national security and foreign policy purposes of the Entity List by commissioning their production in overseas foundries using U.S. equipment.
  • Specifically, this targeted rule change will make the following foreign-produced items subject to the Export Administration Regulations (EAR):
  • Items, such as semiconductor designs, when produced by Huawei and its affiliates on the Entity List (e.g., HiSilicon), that are the direct product of certain U.S. Commerce Control List (CCL) software and technology; and
  • Items, such as chipsets, when produced from the design specifications of Huawei or an affiliate on the Entity List (e.g., HiSilicon), that are the direct product of certain CCL semiconductor manufacturing equipment located outside the United States.  Such foreign-produced items will only require a license when there is knowledge that they are destined for reexport, export from abroad, or transfer (in-country) to Huawei or any of its affiliates on the Entity List.

Commerce added that “[t]o prevent immediate adverse economic impacts on foreign foundries utilizing U.S. semiconductor manufacturing equipment that have initiated any production step for items based on Huawei design specifications as of May 15, 2020, such foreign-produced items are not subject to these new licensing requirements so long as they are reexported, exported from abroad, or transferred (in-country) by 120 days from the effective date.”

The PRC’s Commerce Ministry posted a statement, arguing “[t]he U.S. uses state power, under the so-called excuse of national security, and abuses export control measures to continuously oppress and contain specific enterprises of other countries.” The Ministry vowed the PRC will “take all necessary measures to resolutely safeguard the legitimate rights and interests of Chinese enterprises.”

© Michael Kans, Michael Kans Blog and, 2019-2020. Unauthorized use and/or duplication of this material without express and written permission from this site’s author and/or owner is strictly prohibited. Excerpts and links may be used, provided that full and clear credit is given to Michael Kans, Michael Kans Blog, and with appropriate and specific direction to the original content.

Photo by Marcin Nowak on Unsplash

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