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June 23, 2017

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Safety guarantee required for Huawei 4G equipment

TAIPEI, Taiwan -- A top government official on Monday said the application of a Hon Hai Precision Industry Co.'s (鴻海精密) to procure Huawei's 4G equipment would be ratified once the "backdoor" safety is confirmed.

Minister of Science and Technology Simon Chang (張善政) made the comments yesterday on the sidelines of a digital convergence forum organized by Cloud & Connect TV Forum in Taipei.

National Security Issue

When asked by media to comment on Hon Hai Precision's intention to purchase fourth-generation (4G) base station equipment from China's Huawei, Chang said that it would not be right to make any judgment or conclusion concerning this issue at the moment since the National Communications Commission (NCC) will work with national security advisors to make a decision in accordance with national security considerations.

The application of Ambit Microsystems Corp. (國碁電子) — a subsidiary of Hon Hai Precision Industry Co. — to procure Huawei 4G equipment was put on hold by the NCC last week.

Chang revealed that the main purpose of the NCC meeting was to evaluate the backdoor security of Huawei's 4G equipment.

A backdoor is a means of access to a computer program that bypasses security mechanisms. A programmer may sometimes install a backdoor so that the program can be accessed for troubleshooting or other purposes, thereby making it an administrative tool or a means of attack.

Although Hon Hai Precision Chairman Terry Gou (郭台銘) earlier asserted that many products and parts of Huawei's telecom equipment are made by Hon Hai Precision — even its chips came from TSMC — a telecom expert told local media that hackers can easily insert a base station-level backdoor.

Industrial Espionage Might Increase

"The risk is that when you build a backdoor into systems, you're not the only one who can exploit it. It also dramatically increases the risk of industrial espionage," the telecom expert said.

"If the risk proved controllable, Ambit Microsystems' application will be granted," he added.

A consolidation of Taiwan's 4G mobile market is considered by the government to be "reasonable" because the move could bring economy of scale to some operators and help them provide better services, Chang said.

The minister told the Central News Agency (CNA) that Taiwan's current telecom operators are facing stiff competition from each other because the market appears more crowded than in other countries.

"If there could be a suitable consolidation of the 4G market, it could help some carriers grow," Chang told reporters.

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