Cartography: Zhao Chenxi If you haven't heard of these eight companies, then you must be an outsider.
Yes, these eight companies almost include the most famous companies in the field of AI and security technology in China. Even Time and other foreign media directly gave a general title to the "Sino-US New List Incident":
The United States has blacklisted Chinese AI enterprises.
But as for the reasons for listing, andHuaweiThere are slightly different sanctions for "endangering the national security of the United States". The reason why the U.S. government charged eight Chinese star technology companies this time is "suspected of violating the human rights of some ethnic minorities in China".
It is noteworthy that the timing of this announcement is very special. Because in a few days, China and the United States will resume high-level trade negotiations. But according to the Wall Street Journal, citing Washington, the decision has nothing to do with this week's high-level trade negotiations.
For the eight Chinese technology companies, being listed means that, like Huawei, their local suppliers will be banned from supplying technology and components from the United States without a license.
Influenced by the news, Haikang Video and Huahua Holdings were suspended on Tuesday, while Technological Daxun Airlines dropped as much as 3.1% in Shenzhen stock market.
Of course, the response of the eight companies was also very rapid. Haekangwei, Dahua, Xuan, iFLYTEK and other companies made an official response within two hours of the announcement, but the content is more homogeneous, which probably means "protest calls for the business to be legal and have a good vision."
But among them, Haikangwei's response was the most rapid and intense.
Haekangwei Senior Vice President and Dong Secretary publicly responded that he strongly opposed "being included in the list of entities." this decision has no factual basis and does not have the principles of fairness and fairness, and demands that the US side re-examine and remove Haikang Wei from the list of entities.
Unlike the startups that started with single-point software technology such as Face Recognition, such as Shangtang, Ignorance and Ito Technologies on this list, Haikangwei and Huahua's main business is to sell video surveillance equipment, and their most famous hardware product is security cameras.
In addition, unlike the attributes of consumer hardware products, because the nature of technology companies in the security market is 2B and 2G, coupled with the particularity of China's security market itself, the winners in this market are very low-key.
Among them, far inferior to the well-known Haikang VIP of Huawei, Dajiang and other technology companies, in fact, it is the undoubted leader of the national and even global video surveillance market.
According to the information provided by the Global Video Surveillance Information Service Report 2018, Haikangwei's share of the global video surveillance equipment market is as high as 37.94%, and it has been in the top position for seven consecutive years.
Dahua shares followed, ranking second in market share, reaching 17.02%.
Obviously, they have both domestic and foreign markets, while North America and Europe are Haekangwei's largest overseas market; cameras also have their own supply chain system, and some of the companies' lists of components and chips include American companies.
This means that listing will inevitably be affected.
IFLYTEK, which publicly responds to "no significant impact on the business," has similar problems.
Although the To C business accounts for 37.28% of the total revenue, according to the HKUST News Flight, the company has been actively exploring overseas markets since it shifted its focus from 2B to 2C market in recent years.
At the same time, from the perspective of supply chain, no matter 2B business (providing voice hardware module) or 2C business, chip supply is indispensable.
In an answer to investors' questions earlier this year, iFLYTEK once said that although the AI chip is also being developed, the chip is still provided by the outside world, including Nvida.IntelIn 2005, ARM, Qualcomm and other influential chip manufacturers maintain a good cooperative relationship.
Due to the above doubts in the supply chain, Huolu has contacted Haikangwei and HKUST Xunfei successively, but no clear response has been given.
Hit eight companies hard? Not exactly
For Haikang and Dahua, this result should have been anticipated very early.
As early as May 22 this year, the New York Times announced that the United States would include Haikang and Huahua in the entity list, which sounds like an early warning. It was the exposure that made Haikang and Dahua known to more people.
However, in fact, as early as last year after the ZTE incident, Haikangwei has begun to make strategic adjustments to overseas markets.
According to the 2008 report, Haikang's overseas revenue accounted for 28.47% of the company's total revenue. Among them, 20% of its overseas business was in the US and Canada markets, accounting for about 6% of its total revenue. The North American market did not account for much.
In the semi-annual report of 2019, the revenue of overseas business increased by 10.29% in the first half of the year, the growth rate declined significantly, and the U.S. market revenue began to show negative growth in the second half of last year. At the same time, Haikang's total revenue increased by 14.6% year-on-year, and its performance returned to positive growth by 2.82% year-on-year.
In May this year, after the US "early warning" was issued, Haikangwei emphasized at an investor conference that, in terms of chip demand, American suppliers only provide a small part of it, most of which come from China, and a small part includes Southeast Asia.
In addition, according to the analysis of Zinc Finance and Economics, in the chip supply chain of Haikang and Dahua, the IPC processor, which is the core of the security industry chain, has basically realized localization. Among them, the main supplier of memory chips comes from Japan and South Korea, and the domestic substitution of analog chips is constantly strengthening.
The secretarial Office of Dahua Tung responded similarly in May this year.
They say the company's business accounts for a small proportion of the U. S. market, only a small proportion of the more than 180 countries they serve. In addition, Dahua also said that as early as April 2018, since May, it has begun to be cautious about resource investment in the United States market.
On the other hand, this time it was listed as an entity, which hit the American suppliers of Haikang Video a lot.
Just after the results were released this morning, (Ambarella) shares in Anba Semiconductor, one of Haekangwei's U.S. suppliers, fell as much as 12 percentage points.
This major component supplier of video coding chips is responsible for providing video processing solutions to Haikang Satellite TV. Anbar itself said that although it has not been more affected at present, if there are more restrictions on business dealings with specific customers, it will soon be reflected in the following financial statements.
In this way, the list of events is a repeat of the drama of "injuring the enemy 1000, self-injuring 800".
So, apart from the hardware giants involved this time, what exactly will artificial intelligence startups be affected by?
In fact, in order to prove that they are really worth so much money, Chinese face recognition unicorns have long been transforming from providing single-point technology to hardware business and multi-dimensional software and hardware solutions.
Shangtang, for example, has said that it has more than 700 global partners, including Yingda and Qualcomm, which are very important.
But in fact, in the security market, their hardware business is far from mature, or less competitive. Because of the small amount, it must feel much weaker than Haikang Weiwei and Dahua shares.
Of course, from a purely technical point of view, they are all self-research artificial intelligence technology, and it seems that they like to cluster in the Southeast Asian market since 2018...
This list of entities is of little practical significance to them.
But one of Bloomberg's points is worth noting that the ban could complicate technology-blind initial public offering plans.
The technology company just applied for listing in Hong Kong in August. Although the terms and timing of the listing have not yet been disclosed, people familiar with the plan say that neglect is seeking to raise more than $1 billion.
But overall, although the eight companies will be more or less affected this time, because the AI and security industry chain is relatively special, there are alternative parts to choose, so it is not really under pressure.
In fact, the Wall Street Journal's commentary in the afternoon also pointed out that the U.S. government's move "makes the whole thing look serious", but it has no practical significance.
"although the inclusion of eight Chinese companies on the list this time is highly symbolic, the actions of the U.S. Department of Commerce are unlikely to have a significant practical impact on Chinese companies.
These Chinese companies rely on a large number of non-U.S. suppliers, and the warning a few months ago was tantamount to warning them to adjust their supply chains immediately.
Moreover, even export controls, like Huawei, will not prevent American companies from selling components produced outside the United States to these companies.
Haekangwei will hold an investor briefing meeting on the matter soon, and we will closely monitor and track the further development of the incident.
Author | Yu Duotian, Zhao Chenxi Toutou from Buzzfeed News