How Cellphone Chips Became a National-Security Concern - WSJ - 0 views
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The U.S. made clear this week that containing China’s growing clout in wireless technology is now a national-security priority. Telecommunications-industry leaders say such fears are justified—but question whether the government’s extraordinary intervention in a corporate takeover battle that doesn’t even involve a Chinese company will make a difference.
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Those worries are rooted in how modern communication works. Cellular-tower radios, internet routers and related electronics use increasingly complex hardware and software, with millions of lines of code
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Hackers can potentially control the equipment through intentional or inadvertent security flaws, such as the recently disclosed “Meltdown” and “Spectre” flaws that could have affected most of the world’s computer chips.
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Qualcomm is one of the few American leaders in developing standards and patents for 5G, the next generation of wireless technology that should be fast enough to enable self-driving cars and other innovations. The CFIUS letter said a weakened Qualcomm could strengthen Chinese rivals, specifically Huawei Technologies Co., the world’s top cellular-equipment maker and a leading smartphone brand.
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Washington has taken unusual steps to hinder Huawei’s business in the U.S., concerned that Beijing could force the company to exploit its understanding of the equipment to spy or disable telecom networks.
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Many European wireless carriers, including British-based Vodafone Group PLC, praise Huawei’s equipment, saying it is often cheaper and more advanced that those of its competitors. That is another big worry for Washington.
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board and senior management team are American. “It’s barely a foreign company now, but politics and logic aren’t often friends,” said Stacy Rasgon, a Bernstein Research analyst. “I’m just not convinced that Qualcomm’s going to slash and burn the 5G roadmap and leave it open to Huawei” if Broadcom buys it.