Huawei Accused Of Technology Theft – NPR


Huawei has become one of the world’s biggest manufacturers of cellphones and high-end telecom equipment. Its rise has come with multiple accusations of technology theft.

SCOTT SIMON, HOST:

The Chinese company Huawei has become one of the world’s telecom giants. And there are questions about how it got there, including accusations that it stole technology to get ahead. The Trump administration has now banned U.S. companies from using that equipment in its 5G infrastructure and recently laid out rules that would prevent American firms from doing business with Huawei. Few of those companies have been open about their past work with the Chinese company, but NPR’s Emily Feng found that one was willing to talk.

EMILY FENG, BYLINE: It all began with a few missing pieces of glass – not just any kind of glass, however. Adam Khan, the CEO of AKHAN Semiconductor, explains.

ADAM KHAN: We made this world’s first demonstration of a nanocrystalline diamond-based device.

FENG: Layman’s translation – Khan made diamond-coated glass, and hype brought clients knocking. One of them was China’s Huawei. They wanted the glass for their smartphone screens. Khan knew horror stories about companies having their tech copied by their Chinese partners. Diamond-coated components have military applications as well, so Khan knew his tech couldn’t leave the U.S. without government permission.

KHAN: And also we were very forthright from the beginning that we can’t allow this to ever be manufactured in China directly.

FENG: So after months of haggling, AKHAN Semiconductors sent Huawei’s San Diego office a sample of its diamond glass last March with the promise that Huawei keep it in the U.S. and return it in 60 days. Instead, not only did Khan get the sample back after more than four months but…

KHAN: Immediately picking up the parcel and you could hear the broken glass, you know, we knew there was an issue.

FENG: Someone had blasted a laser at the glass to reverse engineer it. Shards were missing. Looking back, Khan says he should have known.

KHAN: At the very first meeting that we had in their San Diego facility, you know, they semi-jokingly were saying you should leave your samples behind. And we kind of laughed and said, yeah, that’s not going to happen.

KATE O’KEEFFE: This culture really stems from the top and that senior people in the company are really the ones directing that everyone comply with this goal of getting technology by any means.

FENG: Kate O’Keeffe is a Wall Street Journal reporter who’s collected multiple stories of alleged IP theft at Huawei. Among the cases she looked at – the 2010 suit in which Motorola sued Huawei for stealing trade secrets. The companies settled out of court. Then in 2014, T-Mobile sued Huawei for copying a phone-testing robot named Tappy. Huawei later paid millions in damages.

O’KEEFFE: When we looked at the indictment in the Tappy the robot case where we saw Huawei’s employees here in the U.S. actually fighting back against these orders from management, management just wasn’t satisfied with that and forced them to carry on.

FENG: Khan knew of these cases. So after he got back the box with the broken glass, he decided to partner with the FBI. Under their instruction, Khan called Huawei’s San Diego office last December. To Khan’s surprise, the Huawei employee, a woman named Angel Han, admitted the glass had been sent to China in violation of U.S. export control laws.

KHAN: They didn’t seem bashful or reserved in making that comment.

FENG: And then suggested they meet at Nevada’s annual Consumer Electronics Show to seal the deal. So in January, Khan and the FBI headed to Las Vegas. The Venetian Hotel in Las Vegas is a glitzy resort and casino with canals snaking through it. It also would be the site of Khan’s confrontation with Huawei. FBI agents were close by. Khan’s Huawei contact, Angel Han, met him there with her colleague. The tone was cheerful until Khan brought up the missing glass.

KHAN: That’s really when the tone and the emotion did a 180 on their part. Angel had become very distressed, very worried immediately as soon as I mentioned the sample, asking, you know, is the U.S. government listening?

FENG: The meeting abruptly ended. Khan never heard from Huawei again, except for one almost unbelievable email.

KHAN: Stating that they would like to test our materials and that we can bring them to their San Diego facility.

FENG: The FBI raided Huawei’s San Diego facility in late January. The agency did not respond to requests for comment on the investigation, which is still underway. Huawei declined to comment for this story. Khan, meanwhile, is determined to move on. He is accelerating his plans to bring his diamond-coated glass to market, but he couldn’t help himself from looking back just once. A few weeks ago, he drove past Huawei’s San Diego office. The Huawei sign had disappeared. Emily Feng, NPR News.

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