Taking a step towards compliance with the U.S. ‘Clean Network’ program, Nokia has reportedly cut orders with supplier Foxconn Industrial Internet, based on insights delivered by anonymous sources to Nikkei Asia this week.
In light of the Trump Administration’s drive in 2020, the ‘Clean Network’ initiative aims to ensure that U.S. critical infrastructure is handled solely by trusted firms, excluding any connected to the Chinese government or similar entities posing a perceived threat. As stated on the U.S. Department of State website, “The Clean Network addresses the long-term threat to data privacy, security, human rights and principled collaboration posed to the free world from authoritarian malign actors…It represents the execution of a multi-year, all-of-government, enduring strategy…”
This development has continued the trend of U.S. companies – and worldwide companies eager to trade within the U.S. – moving away from Chinese telecoms equipment. The reported order decrease from Nokia primarily affects equipment such as low-power cellular radio access nodes and customer premises equipment (CPE). It’s noteworthy that while Foxconn Industrial Internet is not a Chinese entity itself, it is listed on the Shanghai Stock Exchange.
However, when approached for comment, Nokia presented a slightly different picture. They stated, “As a global company, Nokia has a highly resilient global supply chain, the diversity of which [has] been maintained and even increased over recent years. We carefully balance the need to locate supply chain operations as close as possible to customers with the benefits of scale and requirements for technical specialization and high quality.”
Meanwhile, Foxconn Industrial Internet kept their cards close to their chest, choosing to offer no clarity on the possible changes. Their statement merely asserted that their “cooperation with the client is proceeding as usual”.
In an interesting turn of events, China too is making moves to lessen its reliance on U.S. technology. In an unexpected twist, the Chinese government is phasing out U.S. tech from their government devices, ominously signalling a potential hit for big players like Intel and AMD.
To highlight the global scale of these developments, we only need to turn to Microsoft’s recent $1.5 billion investment in Emirati AI firm G42. However, this move was made only after G42 agreed to distance itself from Chinese technology. As G42 CEO Peng Xiao candidly admitted to the Financial Times, “For better or for worse, as a commercial company, we are in a position where we have to make a choice. We cannot work with both sides.”
This series of events rings a clear message. The battle for technical sovereignty has begun in earnest, with both U.S. and Chinese companies, alongside telecoms companies around the world, being forced to choose their allies carefully in this rapidly evolving market.
