Speaker 1: You're listening to Bloomberg Business Week with Carol Messer and
Speaker 1: Bloomberg Quick Takes Tim Stinovic on Bloomberg Radio. So some
Speaker 1: news came out early this morning. Whahwei Technologies their net
Speaker 1: profits surging see despite deep revenue declines across its business,
Speaker 1: all reflecting efforts to shave costs and really rely on
Speaker 1: home grown components to whether the fallout from American sanctions.
Speaker 1: The Chinese networking and smartphone giant unveiling its annual results
Speaker 1: at a briefing presided over by its CFO, who meets
Speaker 1: media for the first time since her September release from
Speaker 1: three years of house arrest in Canada. There's a lot
Speaker 1: going on in a lot to unpack with our next guest,
Speaker 1: Maaty Purdy, is Chief security officer at Huawei Technologies USA.
Speaker 1: Joins us via Zoom from College Park, Maryland, from Washington.
Speaker 1: See rather, uh Andy, it's good to have you back
Speaker 1: with us. How are you? Thank you? It's good to
Speaker 1: be here. It's been that crazy time, Yes, it really has. Hey, Um,
Speaker 1: we'll get to the results in a few minutes. I
Speaker 1: do want to start though, with Russia's invasion of Ukraine
Speaker 1: and and really try to understand and because we've seen
Speaker 1: so many multinational companies pull out of Russia UH and
Speaker 1: stop doing business there as a result of what happened
Speaker 1: more than a month ago and continues to this day. UM,
Speaker 1: where is where is Huawei when it comes to doing
Speaker 1: business in Russia? Well, our rotating chairman while paying on
Speaker 1: the press conference earlier today, so that while we're studying
Speaker 1: the policies of different countries and regions of the world, UH,
Speaker 1: and he is not yet in a position to make
Speaker 1: an announcement about whether we're going to continue to do business.
Speaker 1: We very much value our business in Ukraine and having
Speaker 1: been there, it's a it's an unbelievably terrible situation. I
Speaker 1: hope we can go to ceasefire soon and and bring
Speaker 1: back to children and the people that had the fleet.
Speaker 1: No absolutely, UM, and give us an idea of how
Speaker 1: much business you guys do in Ukraine, how much business
Speaker 1: you do in Russia? How important are those markets? You know?
Speaker 1: I don't have a number right now, We'll have to
Speaker 1: get that for for another time, UM. But we have
Speaker 1: been focusing on a hundred and seventy countries in the world.
Speaker 1: In fact, I recently you know, a couple of years
Speaker 1: ago before the pandemic. I went to Moldova before when
Speaker 1: the Romania, Moldova being west of Ukraine, and I was
Speaker 1: in Kieva twice in so the size of the country,
Speaker 1: the amount that we make doesn't matter. We really are
Speaker 1: trying to do business where people are willing to do
Speaker 1: business with us and where we can bring value to
Speaker 1: our partners and to our customers. Uh, that's where we
Speaker 1: can get some value ourselves. So uh, it's uh, it's
Speaker 1: it's a very difficult, trying time and hopefully we can
Speaker 1: get to a better place soon. What about when you
Speaker 1: know one thing that we've talked a lot about on
Speaker 1: the program over the last six weeks or so, uh
Speaker 1: Andy has has been the tech talent in both Russia
Speaker 1: and Ukraine. And I know that Lahwe has made a
Speaker 1: lot of robust hires in Russia, recruiting a lot of
Speaker 1: engineers there. Um, what do we know about those engineers
Speaker 1: and plans to hire more in Russia. Yeah, we're trying
Speaker 1: to get to take stock of what this situation actually is.
Speaker 1: Our communications is not what we might like. Um. We
Speaker 1: certainly have hired globally a tremendous number of new employees
Speaker 1: and engineers, and and the quest for talent is a
Speaker 1: is a fundamental thing that is critically important us in
Speaker 1: other companies. But we do under andy, like in terms
Speaker 1: of I understand it's probably very difficult to get the
Speaker 1: lay of the land considering what's going on in Russia
Speaker 1: in terms of any kind of hiring you want to do.
Speaker 1: But what is the position in terms of the hiring
Speaker 1: you are looking to do and how aggressively you know
Speaker 1: you are continuing with those plans or has that change?
Speaker 1: Are you considering pulling back because of the current conditions
Speaker 1: and geopolitical problems. I haven't seen anything yet on uh
Speaker 1: the impact on on hiring. Be very surprised if there
Speaker 1: isn't an impact, But that that's something we just don't
Speaker 1: have information on right now. What is the exposure though?
Speaker 1: Can we get an idea of how much you know,
Speaker 1: in terms of the business you guys are currently doing there.
Speaker 1: I know you can't give market size, but how big
Speaker 1: is the team there on the ground. I mean, you
Speaker 1: guys are global I know there's back and forth. Globalization
Speaker 1: means we all have to be you know, a company
Speaker 1: has to be talking to its different divisions. How big
Speaker 1: is the team on the ground in Russia. I'm sorry,
Speaker 1: I don't have numbers on how many people we have
Speaker 1: here beyond what you reference in terms of people that
Speaker 1: we hired there, so I'll have to get back to
Speaker 1: you on that. I'm wondering about, you know, potential contingency
Speaker 1: plans for sanctions on Russia or or sanctions were if
Speaker 1: they were imposed on China. Have you have you been
Speaker 1: able to talk through any contingency plans there? Well, our
Speaker 1: focus has been business continuity generally around the world with
Speaker 1: the challenges that we faced with the pandemic and the
Speaker 1: impact on the on the global supply chain. Uh, and
Speaker 1: trying to make sure that we can have a diversified
Speaker 1: supply chain so that we can meet the needs to
Speaker 1: meet the needs of our customers. UH. So we we
Speaker 1: we need more information and uh, you know, we're trying
Speaker 1: hard to to get it so Andy. You know, I
Speaker 1: feel like one of our big stories, you know, and
Speaker 1: I don't need to sugarcoat it is all about semiconductors
Speaker 1: in demand and you know how this the pandemic and
Speaker 1: what's going on right now is impacting kind of global
Speaker 1: supply chains. Talk to us a little bit more about
Speaker 1: what your plans are, what we always plans are in
Speaker 1: terms of chip making. UM, you know, we have ideas
Speaker 1: about you guys, I think weaning yourself off American Latin
Speaker 1: latent chips, finding ways to get more out of mature technology.
Speaker 1: Give us, give us some ideas of what the plans
Speaker 1: are going forward. Well, we've been impacted tremendous ease. You
Speaker 1: know why, our inability to get the chips for our
Speaker 1: consumer mobile devices. UH, and so that has caused the
Speaker 1: gigantic hit in our revenue. They're fortunately our five jeep business,
Speaker 1: we're able to use the less sophisticated chips to to
Speaker 1: to maintain that business. We have been emphasizing trying to
Speaker 1: improve our our product portfolio. We've managed to make our
Speaker 1: operations and in five G and telecom stable. UH. We're
Speaker 1: fortunately able to meet the demands. And I think there
Speaker 1: was a study that came out recently of Whilways five
Speaker 1: G and in thirteen different countries that were we provide
Speaker 1: the best user experience. Our enterprise business has has drown
Speaker 1: dramatically with digitization. UH. That's affecting UH, individuals and organizations
Speaker 1: around the world. We've we've been chosen by seven hundred
Speaker 1: cities and two hundred and sixty seven of the Fortune
Speaker 1: Global five companies to be their digital transformation partner, and
Speaker 1: we have six thousand service and operation partners doing that
Speaker 1: around the world. We're also investing heavily, and I'm sure
Speaker 1: you saw over of our revenues we invested in R
Speaker 1: and D, which is an extraordinary number. Heavily invested in
Speaker 1: in some pure research, trying to figure out how to
Speaker 1: make the connectivity better, how to reduce energy consumption using
Speaker 1: digitization of energy has been a major thing that we're
Speaker 1: trying to do to help the I c T industry.
Speaker 1: You need the car numbers for UH AND and we
Speaker 1: feel like we're making tremendous progress on that. Part of
Speaker 1: that is not just generating in power, but it's storage
Speaker 1: and the availability of the storage too. When when you
Speaker 1: can't get the sunshine that you can you can have
Speaker 1: the energy. So we're talking with Andy Purty, he's chief
Speaker 1: security officer at Huawei Technologies USA, joining us via zoom
Speaker 1: from College Park, Maryland. Hey, Andy, to go more with chips.
Speaker 1: I mean, because this is the story when it comes
Speaker 1: to supply chain, at least for tech companies. In two
Speaker 1: UH a story in on Bloomberg just a couple of
Speaker 1: weeks ago, continues to talk about the way times for
Speaker 1: semiconductors just rising again. In February, assigned that the shortages
Speaker 1: are continuing for chip buyers in a wide range of
Speaker 1: industries twenty six point two percent weeks last month, according
Speaker 1: to Susquehanna Financial Group. So where exactly are you going
Speaker 1: to be able to go to get chips to satisfy demand? Well,
Speaker 1: we are working hard to help push the limits on
Speaker 1: the foundational technologies UH that underlie semiconductors, not that we're
Speaker 1: going to manufacture them ourselves, but trying to make some
Speaker 1: some great progress in some of the scientific theories in
Speaker 1: the world to increase capacity and the capabilities of less
Speaker 1: sophisticated different kinds of chips, different kinds of technologies to
Speaker 1: allow uh the network and communication devices to function. We've
Speaker 1: hired a number of experts from around the world, scientists
Speaker 1: to impure research UH, and we feel like we're making
Speaker 1: some very important progress, and we're participating in the in
Speaker 1: the public collaborations with experts around the world on that.
Speaker 1: So we hope that's going to bear some very significant
Speaker 1: fruits in terms of architecture, computing architecture and software performance,
Speaker 1: UH and the ability to store energy and create more
Speaker 1: energy and use a lot less energy in the information
Speaker 1: and communications technologies. Hey, Andy, you know you're there in
Speaker 1: in uh, you know, College Park, Maryland, not too far
Speaker 1: from d C. And I'm thinking about you know, President
Speaker 1: Biden putting out his budget today and he talked a
Speaker 1: lot about security as well. What is Huawei doing. What
Speaker 1: are the conversations that you are having uh with the
Speaker 1: higher ups when it has to address when it has
Speaker 1: to address specifically the security concerns raised by foreign countries,
Speaker 1: particularly the United States, which, as you said, and we
Speaker 1: know is really you know, crympt what Huawei can do well.
Speaker 1: The United States has been unwilling to talk with us
Speaker 1: for quite some time. So we're encouraging the United States
Speaker 1: to get involved in the international standards efforts that are
Speaker 1: going to help contribute to a safer cyber space. We've
Speaker 1: offered to open up our facilities to have government officials
Speaker 1: from the United States and elsewhere to command to see
Speaker 1: what we can do, what our competitors can do to
Speaker 1: be more effective, to be more resilient, and frankly, to
Speaker 1: to be more transparent. We are working with the industry
Speaker 1: organizations and standards bodies to create a safer cyberspace. Uh
Speaker 1: and that requires some some hardcore work in terms of
Speaker 1: setting requirements and learning lessons from these cyber attacks. In
Speaker 1: the last year or so, the idea of so called
Speaker 1: notion of trusted suppliers is no longer any good. We
Speaker 1: saw the taxes. Do you anticipate any forgive me for
Speaker 1: jumping in because we've only got about a minute left,
Speaker 1: I mean, is it likely to get any better? But
Speaker 1: we're not fundamentally concerned about being able to do business
Speaker 1: United States. We hope that we can help share what
Speaker 1: can benefit the United States, whether it's from US or others.
Speaker 1: What is fundamentally important is to grow the ability of
Speaker 1: American government and organizations critical infrastructure to defend themselves. And
Speaker 1: we think we can share some experience in that. Do
Speaker 1: you think because of China's reluctance to condemn Russia is
Speaker 1: only going to complicate the relationship between US and China,
Speaker 1: especially on something like the tele telecommunications or technology. Well,
Speaker 1: there an awful lot of people in the world that
Speaker 1: hopefully United States is going to collaborate with to to
Speaker 1: help improve our defenses. Uh and to try to improve
Speaker 1: the quality and nature of information sharing about private companies
Speaker 1: and government agencies. And we're happy to be as transparent
Speaker 1: as possible to help contribute to those dialogues, contribute to
Speaker 1: coming up with an objective and transparent basis for knowing
Speaker 1: which products and services are worthy of trust and which
Speaker 1: ones are going to be resilient. All Right, we're gonna
Speaker 1: leave it there, uh Andy, thank you so much. Andy
Speaker 1: Purty is chief Security Officer at Wahwei Technologies USA, joining
Speaker 1: us via Zoom from College Park, Maryland.