The surprise arrest of Huawei Technologies Co.’s Chief Financial Officer Meng Wanzhou is about to impact one of the Chinese company’s suppliers in Japan.
Yaskawa Electric Corp., which supplies industrial robots for Huawei’s smartphone and telecom gear factories, saw all orders for its machines put on hold after the arrest, President Hiroshi Ogasawara said in an interview on Wednesday. Of Yaskawa’s 448.5 billion yen ($4 billion) in revenue for the fiscal year that ended in February, 23 percent came from China.
“My people on the ground in China say that Huawei is turned upside down internally,” Ogasawara said. “All kinds of capex deals are temporarily on hold as they figure things out.”
Huawei declined to comment. Yaskawa’s stock erased earlier gains in Tokyo trading, falling as much as 4 percent. Shares of other factory automation companies Fanuc Corp., SMC Corp. and Nabtesco Corp. have also paired gains.
Meng was arrested in Vancouver at the request of U.S. authorities for allegedly violating sanctions related to selling technology to Iran. While her detention has become an international incident, this is the first indication that it is beginning to affect Huawei’s operations. The arrest has further undermined the international standing of the company, which was already under suspicion in the West because of its ties to the Chinese government.
Separately, the Japanese media reported earlier this week that the country’s top three carriers — NTT Docomo Inc., SoftBank Group Corp. and KDDI Corp. — will ban telecommunications equipment by Huawei and ZTE Corp. France’s Orange SA said it does not plan to work with Huawei to build its fifth-generation mobile network.
The order freeze is making Yaskawa reconsider its outlook on the timing of demand for 5G phones and communications equipment, because Huawei was at the forefront of the technology’s rollout, Ogasawara said.