Huawei manager Richard Yu shows a Huawei processor
Photo: OMER MESSINGER / EPA-EFE / REXFor more than a year, Huawei survived the US trade restrictions largely unscathed. Most recently, the group was even able to declare itself to be the world market leader in smartphones. Although business in the west had slumped by a good quarter, the strong demand in China more than made up for it. With 55.8 million cell phones sold worldwide from April to June, the Chinese electronics manufacturer moved ahead of Samsung to the top. But now there is apparently a threat of a standstill in the factories. According to a report by the Associated Press news agency, the company is running out of microchips as a result of the US sanctions.
Huawei is dependent on supplies for the production of its microchips; the company does not have its own chip factories. So far, the company has bought components from Intel for its notebooks, Huawei smartphones are partly powered by Qualcomm chips and partly by Kirin chips. The latter are developed by Huawei itself, but production has to be outsourced to other companies.
At the China Info 100 conference, Richard Yu, head of the company's consumer electronics division, said that the production of Huawei's Kirin processors would end on September 15th. The reason for this is that the producers need US technologies to manufacture the chips, which they are not allowed to use for Huawei due to the US sanctions.
Tightening of sanctions
Last May, the US put Huawei on a list of companies whose business relationships with US partners are subject to strict controls. As a result, Google, for example, had to cut the Chinese company's access to the so-called Google Mobile Services, which perform essential functions on Android smartphones. New Huawei smartphones can no longer access Google's Play Store, i.e. no apps can be obtained from there.
Although the US Department of Commerce responsible for the sanctions had granted US companies a number of exemptions for doing business with the Huawei group, the main aim was to enable mobile operators who use Huawei's network technology to switch to products from other providers. On May 15, however, Secretary of Commerce Wilbur Ross tightened the sanctions and had them explicitly supplemented with a regulation that forbids chip manufacturers from supplying semiconductor products to Huawei if they were based on software and technology from the USA.
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Qualcomm wants to keep Huawei as a customer
"This is a big loss for us," said manager Yu at the conference in China. According to him, Huawei's suppliers have only accepted orders from the group until May 15. "Production will end on September 15th," said Yu, adding, "It could be the last generation of Kirin chips." Huawei could no longer produce any new chips in the future if it would not get any more supplies. The stocks of processors that the company had created last year in anticipation of sanctions should therefore be used up.
US chipmaker Qualcomm has meanwhile lobbied the US government to allow processors to be supplied for Huawei's 5G smartphones, reports the Wall Street Journal. The US restrictions would not be able to prevent Huawei from procuring the required components elsewhere, argues the group. In addition, one would play into the hands of Qualcomm's competitor Huawei, a customer who buys chips for eight billion dollars a year.
The processors currently still being produced for Huawei should primarily be planned for the Mate 40. The presentation of this smartphone, which should be Huawei's new top model, is expected for September.
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