As American technology firms heed Trump’s executive order effectively banning U.S. equipment sales to Chinese telecom giant Huawei, Akhan Semiconductor CEO Adam Khan sees anticipated short-term pain as long-term gain.

“I don't think that the U.S. has actually been aggressive,” Khan said. “I think that Huawei has been aggressive against the United States and the U.S. has been very muted in this response. What I would like to see is more conversation around American intellectual property, and how much has been stolen versus what we can do to prevent future instances.”

Khan says he and his company became embroiled in a U.S. Justice Department criminal investigation against Huawei when a sample of his proprietary diamond-coated glass, sought after by the world’s largest mobile device manufacturers as next generation technology, was returned from Huawei, in pieces.

“It came back inside the box, you could hear glass breaking against it,” Khan said. “We open it back up and then putting the pieces together, you could see there was large portions of the glass missing.”

‘Protecting American innovation’

On May 15, President Donald Trump issued an executive order prohibiting U.S. companies from using telecommunication equipment designated by the Secretary of Commerce as a risk to national security. The order also bans U.S. companies from selling goods to China if the goods contain 25% or more technology or material originated in the U.S. American companies have until August 19 to comply.

View photos Workers clean the front of the new Huawei flagship store due to open soon in Madrid, Spain, Wednesday, May 22, 2019. (AP Photo/Paul White) More

So far, the Trump administration has maintained that the executive order and sanctions address U.S. concerns that Chinese companies pose a national security threat and are unrelated to the broader U.S.-China trade dispute. Huawei told CNBC that blocking it from the U.S. market could hurt the development of 5G technology.



“Restricting Huawei from doing business in the U.S. will not make the U.S. more secure or stronger; instead, this will only serve to limit the US to inferior yet more expensive alternatives, leaving the US lagging behind in 5G deployment, and eventually harming the interests of US companies and consumers,” the company said in a statement.

For his part, Khan said his case is just one example of attempts by Huawei to steal U.S. intellectual property.

“As a young innovator, and an American innovator that did all the R&D here domestically, I would love for this to be the case that turns the ship on this culture that it's okay to steal from startups and young researchers and get away with it and, and settle with a lawsuit downstream,” he said.

Khan hopes the U.S.’s current sanctions against China end up serving a secondary purpose.

“I think for right now, it's not really speaking to protecting American innovation,” he said. “I think right now, it's just a national security threat, and they're kind of pigeonholing it there. But I do see that it’s part of a broader discussion that needs to be brought to light.”

To critics who argue that the U.S. could ultimately harm its own economy through sanctions against Chinese companies that force more Chinese innovation and in turn decrease reliance on American manufacturers, Khan disagrees.

“I don't think their position is as strong as perhaps they're portraying,” he said. “They are very reliant upon our core technologies, and not just electronics, and not just chips themselves. The metallurgy, the way we actually form the phones, the ceramics, I mean, these are all American know-how.” So long as European partners are aligned with the U.S., Khan said, aggressive sanctions against China do not increase risk.

“They will attempt to have their own capability, but China has already spent over $300 billion, trying to get semiconductor capability internally, and they have largely failed. It's that very reason why they're going so far as stealing technologies, because acquisition and R&D is not working,” Khan said. “I’d be strained to name one good Chinese chip company at the moment.”