You can’t breathe before dying: Huawei rowing any chips it can reach

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You can’t breathe before dying: Huawei rowing any chips it can reach

On August 17, the Chinese company Huawei faced unexpected difficulties: the US authorities effectively banned companies around the world from supplying it with components under new contracts. Obligations under existing contracts must be fulfilled by September 14. Now Huawei is frantically stocking up on chips as time is running out.

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In contrast to the situation in May, when the US authorities banned the production of components ordered by Huawei, now we are talking about the supply of any serial products using technologies of American origin. For the same MediaTek, in particular, Huawei cannot count on obtaining processors for its smartphones. Sources told Nikkei Asian Review that the Chinese giant is now urgently trying to build up the largest possible stock of components it will need to make smartphones. Analysts expect Huawei’s smartphone shipments to shrink fourfold after running out of parts next year.

According to the primary source, Huawei is now buying up even those batches of chips that have not yet passed the stage of testing and installation in the case. In fact, suppliers ship entire silicon wafers with chips to Huawei, which then have to be “cut” at the contractors’ enterprises. MediaTek immediately disowned participation in such machinations. It is reported that representatives of Huawei can hold night meetings or call suppliers after hours, just to have time to agree with them on the shipment of the desired number of components.

The participants in the process admit that they cannot dramatically increase the supply of the most demanded components, so the hustle and bustle of Huawei does not always help the cause. Other vendors are concerned that Huawei has purchased specific products from them, and it will be difficult to add them to other customers if necessary.

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In the field of telecommunications equipment, Huawei has already managed to create an approximately two-year stock of components for the production of base stations. Now the company is trying to do roughly the same in the smartphone segment. Experts warn that it will not be so easy to create new models of smartphones from the stock of existing components. All this puts Huawei in a difficult position, and partners of the company, who simply did not expect the rapid introduction of American sanctions in August, also suffer.