The Big Picture: Globalization—The Onset of COVID-19

In my last column, I spoke about the challenges of tariffs and alternate sources for PCBs and the larger divide between the U.S. and China, potentially leading to far broader implications for U.S.-led vs. China-led technologies. The world has changed dramatically since then. We’re thick into the midst of a global COVID-19 outbreak, which I believe has only created a larger divide between the two largest economies: the U.S. and China. It has become apparent that critical supply chains have been broken and, for the most part, each nation has been fending for themselves.

This divide started when China evolved from just making shoes and toys to engaging in high-tech with significant economic and military implications. This divide has manifested most vividly in the telecom industry with the upcoming 5G rollout. Whoever controls the global digital infrastructure controls the world. This is where the U.S. has gone to extreme measures to rein in Huawei—China’s leading maker of telecom equipment. The company leads the world in 5G with its promise of extreme data rates (up to 20 Gbits/sec) and much lower latency (around 1 ms). 5G will become the backbone and central nervous system of the global economy, powering technologies such as IoT and AI to places currently not possible. At the heart of this fight is the worry that Huawei—and, implicitly, the Chinese government—will have access to everything that goes through a Huawei-supported network.

By any measure of objectivity, America is losing this fight against Huawei in the great “race to 5G.” Huawei keeps growing, and the 5G rollout in China continues at a rapid pace. We know this directly as almost every one of our China PCB suppliers is extending lead times by weeks for one main reason: they are flooded with 5G orders from the likes of Huawei and ZTE.

Now that China is ramping back up to full capacity after living through the brunt of COVID-19, they are in a unique position to gain even more ground on the U.S. The strategy the U.S. has deployed to battle this onset is a fundamentally flawed one. Their solution is to ban or seek permission from Washington D.C. by any chipmaker that uses U.S. technology to sell its products to Huawei. Building a wall around Huawei is impossible in a hyper-connected world where technology and talent can flow freely. The wall has already started to crack; Germany, for example, has forged ahead with incorporating Huawei into its 5G system.

A technological quarantine won’t work; it only provides extra incentives for Huawei and China to become technologically self-sufficient. Last year, Huawei announced a plan to develop an “invincible iron army” of friendly suppliers if they permanently lose its U.S. partners. It’s already developing its own operating system to eliminate the need for Google’s Android platform and allow it to compete directly with Apple iOS.

It’s like we’re trying to win today’s “technology cold war” with yesterday’s arsenal and old thinking. If anything, the onset of COVID-19 has taught us that we need new thinking and a new approach. I have always maintained that business thrives on openness and a healthy balance of competition and co-operation. The good news is our technology industry has thrived on these guiding principles, and the same approach should now lead the way to a new future.

Look at what happened in the IT world when the movement to the cloud and hosted platforms became the wave of the future. Our technology companies solved the problem through openness and innovation—the idea of virtualization allowed the cloud and hosting platforms to become realities. Virtualization basically decouples services from the underlying hardware and allows virtual provisioning of an entire network.

Why can’t this be done with mobile networks? It turns out that it can. Mobile networks have long been dominated by specialized hardware and are more and more becoming defined by software. Rakuten—a Japanese company—launched the world’s first fully “virtualized” mobile network on April 8, built using general-purpose hardware and a lot of software, mostly from companies like Nokia, Qualcomm, and Cisco. Additionally, introducing a virtualized software layer would allow for a solid security layer where access to data passing through the network could be much more secure. In such a virtualized network, the fear of security breach using components from even Huawei could be minimized or possibly eliminated.

My essential point here is that we need to rely on time-proven success of ingenuity, inventiveness, and openness, which have been the hallmark of U.S. companies to bring solutions that can be embraced by everyone, including China. I am confident that no one—not the U.S. nor China—wants two separate, unconnected major technology platforms, with the world divided into two internets and two mobile networks that don’t interact with each other. If that happens, humanity may follow into those two camps, which would be even worse.

Mehul J. Davé is CEO and chairman of Entelechy Global Inc. and chairman of Linkage Technologies Inc.

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2020

The Big Picture: Globalization—The Onset of COVID-19

04-20-2020

In Mehul Davé's last column, he spoke to the challenges of tariffs and alternate sources for PCBs and the larger divide between the U.S. and China, potentially leading to far broader implications for U.S.-led vs. China-led technologies. The world has changed dramatically since then. Mehul explores how the COVID-19 outbreak has impacted the rollout of 5G and relations between the U.S. and China.

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The Big Picture: Globalization—Tariffs and Alternate Sources

01-09-2020

The new year is upon us, so Mehul Davé started thinking about the main challenges his company and customers are facing as we enter 2020: tariffs and finding alternate sources for PCBs. Mehul shares his thoughts.

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2019

The Big Picture: Globalization—What Happened?

07-16-2019

Cheap products and services from places like China and India are good, but giving up the position of being the top dog doesn't sit well with most people—especially when you have leaders around the world reminiscing about the past and wanting to make XYZ great again or something similar.

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Can Do in CAM Outsourcing: CAM Engineering— Building Redundancy in Critical Areas

01-22-2019

Many believe that outsourcing is wrong because it takes away from local jobs. That may be the case if this industry can find the talent level at a cost that they can afford, but this is not the case in North America or Europe.

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2018

‘Can Do’ in CAM Outsourcing: Improving Quality in CAM Engineering

09-19-2018

In this series, Mehul J. Davé, CEO of Entelechy Global Inc., will address six ways in which a company can significantly benefit from outsourcing their front-end CAM work.

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CAM Engineering—Reducing Costs

06-12-2018

While having on-demand capacity, improved automation, and fast turn-around are critical to any front-end engineering operation, achieving those goals with a cost-effective solution is imperative. Electronics are constantly under cost-reduction pressures. Functionality, capability, and complexity increase while costs decrease.

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2017

CAM Engineering—Fast Turn-Around

09-11-2017

Time-to-market has been the mantra for every successful technology company. The best among them have strong and integrated supply chains that march to the drum of the OEMs and EMS providers that bring that technology to market. A big part of that success, especially in North America and Europe, is the ability for PCB manufacturers to turn around complex PCBs very quickly. The hallmark of PCB production in these higher-tech, higher-cost regions is flexibility and responsiveness.

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2016

CAM Engineering – Automation

12-19-2016

As volume production in PCB has shifted significantly to Asia, manufacturers in Europe and North America have been focusing on high technology, quick-turn, prototype, and lower-volume production.

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A Case for Outsourcing CAM Engineering

04-29-2016

In the West, outsourcing is sometimes considered taboo and many believe it is one of the causes for shifting our manufacturing base to the East—specifically China and other lower cost Asian countries. In this series of columns, I will make a case in support of CAM outsourcing—especially for North American and Western European printed circuit board manufacturers.

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