Huawei is well known a mobile phone and telecommunications equipment maker—one that recently staged a comeback from years of US sanctions to unveil a smartphone powered by advanced domestic chips. DJI, meanwhile, is best known as the world’s largest drone maker.
But the two Chinese companies do far more than just phones and drones.
Their recent push into autonomous driving is illustrative of China’s approach to building industry: developing vertically integrated supply chains; focusing on physical products and applications with concrete use cases; and building industrial operating platforms. Together, these form reinforcing cycles that compound existing strengths and create new points of competitive leverage.
Building on existing tech to compete in emerging tech
Also last month, Chinese media reported that EV giant BYD and Chinese state-owned carmaker FAW—presumably motivated in part by a desire to hedge bets and not be overly reliant on Huawei for smart driving tech—are looking to invest in DJI’s autonomous driving unit.
Huawei and DJI are taking different approaches to autonomous driving technologies.
But there are also clear similarities between Huawei and DJI as they dive into the smart car realm.
Both had large global market shares in smartphones and drones respectively, but were hobbled by US sanctions. Huawei’s smartphone sales plummeted, while DJI’s share of the global commercial drone market shrank.
Huawei and DJI are two less discussed examples. They started with telecommunications modules and drones, and expanded to another downstream segment: automotive solutions.
By planting their flags in the autonomous driving sector and providing their technologies to major automakers, both Huawei and DJI are also positioned to shape operating platforms—and to influence the development of emerging industrial domains.
Weekly Links Round-Up
🖇️ Export control whac-a-mole… Why are exports of ASML’s lithography machines to China restricted by the US, but not German-made RaitH electron beam lithography systems used to make chips for quantum computing?
So asks the journalist Silke Wettach: “The case shows a fundamental problem of export controls: Each country decides individually. Just because one decides on an export ban does not mean that others will move with it.” She also details Berlin’s recent move to “monitor” exports of a structural foam with potential military uses, and questions more forceful steps aren’t being taken to prevent it from being sold to China. (WirtschaftsWoche)
🖇️ …and still more whac-a-moling. A joint investigation by two independent news outlets traces how high precision machine tools from Taiwan are making it to Russia, via transhipments through Turkey and China, and fueling Moscow’s war machine.
Examples of sanctions evasions via third-countries and -dealers are a dime a dozen across different sensitive technologies. Meanwhile, leading commercial players in strategic industries, like aerospace, are openly sharing sensitive technologies with China. (The Insider and The Reporter, MERICS)
“Huawei’s [sic] is getting into the space sector in multiple ways as the right company in the right place at the right time. Huawei is uniquely positioned as one of China’s leading mobile phone manufacturers, and also leading network manufacturers. Huawei is the only company with direct exposure on both the networks side of the equation, and the user side of the equation.” (China Space Monitor)
🖇️ A robust industrial base underlies any high tech contest. In a report published last month by defense software company firm Govini, authors Jeffrey Nadaner and Tara Dougherty write:
“Many American national security scholars have focused on the high-tech innovation competition between the United States and China. This focus, however, risks losing sight of the defense industrial base—the thousands of companies of all sizes, types, and product lines—that turn those innovations into real-world weapons systems and platforms that win wars. Certainly, the contest for technological supremacy is crucial. But so is the contest for industrial production.” (Govini)