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U.S. sanctions have Huawei running out of smartphone chips



Illustration for the article titled Huawei has about a month before it runs out of smartphone chips

picture: Patricia De Melo Moreira (Getty Images)

Trump administration sanctions are hitting Huawei hard, and Chinese tech giant now says it will run out of processor chips for its smartphones by September, without access to US retailers, according to a weekend Report in the Associated Press.

Huawei, one of the world’s leading telecommunications providers, has been on the blacklist ever since May 2019 by sourcing ingredients for its equipment from US companies under an executive order from President Donald Trump. In a sweeping escalation of ongoing technology disputes between the US and China, the ban targeted several foreign companies that intelligence officials argued could pose a threat to national security. In recent months, the White House further restricted restrictions and the Federal Communications Commission designated by Huawei a threat to national security, and the consequences have left Huawei spreading.

As Huawei engineers themselves design one of its most advanced processors, the Kirin chip, production is handled by contractors who rely on U.S. manufacturing technology, said Richard Yu, president of the company’s customer unit, at the China Info 100 industry conference. Friday for AP. Without access to those suppliers, production will end on September 15 in what Yu called “a very big loss for us.”

“Unfortunately, in the second round of US sanctions, our chipmakers only received orders until May 15,” Yu said. “Production will close on September 15. This year could be the last generation of high-end Huawei Kirin chips.”

As a result, he added, the company has no “chips and no supply” for its smartphones, which recently surpassed rival Samsung as the world’s best-selling brand for the first time with 55.8 million devices sold in Q2. according to technology research firm Canalys. Yu attributed the success in the first half of 2020 to growing demand in China and strong sales of high-end products, but predicted that Huawei’s overall smartphone sales this year would fall below 2019’s total of 240 million devices sold.

However, a life preserver may be in. According to Wall Street Journal, US chip company Qualcomm is lobbying US policymakers to ease sanctions and allow it to sell Huawei chips for the manufacture of their 5G phones. The company argues that the export ban does not only hurt Huawei: By cutting off Qualcomm from potential sales of core components in the Huawei device, the ban is essentially giving the market – worth as much as $ 8 billion a year – to foreign competitors like Samsung and MediaTek of Taiwan.

“If Qualcomm is subject to export licensing but its foreign competitors are not, the US government policy will cause a rapid change in the 5G chipset market share in China and beyond,” the company said in a presentation before federal officials reviewed by the Journal. This would not only hurt US technology research, but could jeopardize the country’s global leadership in 5G, which would be “an unacceptable result in US interest.”

The Commerce Department may grant licenses to individual businesses to circumvent the ban and sell Huawei, which Qualcomm argues would generate billions of dollars in revenue for the company to come up with its own development and new technologies. Other US estate makers have applied for similar licenses, including Intel, Micron Technology and Xilinx, the newspaper reported.

And it is understandable that American companies will struggle to get a piece of that pie. Even blacklisted by the US and with pandemic rabies coronavirus, Announced Huawei it had generated revenue of $ 64.8 billion during the first half of 2020 – not as much growth as in previous years, but still nothing to sneeze at.


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