Imagine Being The Biggest Smartphone Company In The World But Not Having The Parts To Produce Anything
That’s right, it looks like Huawei are finally starting to feel the full effects of Trump’s ban on the company. It turns out that the ban wasn’t so much of a beheading but more of a knife to the side as the company’s slow bleed starts to come full circle.
What started in May 2019 will now go on until at least May 2021 after Trump extended the order and it’s this extension that’s really starting to affect Huawei. Last May, an amended export rule issued by the US Commerce Department blocked shipments of semiconductors to Huawei and the company has announced that it’s running out of processor chips because of these sanctions.
According to Richard Yu, CEO of Huawei’s consumer business unit, this year could be the swansong for the company’s Kirin high-end chips. Come next month, the Chinese giants won’t be able to make its own chipsets because of the pressure from the US ban.
Speaking at a conference last week, Yu said “Unfortunately, in the second round of U.S. sanctions, our chip producers only accepted orders until May 15. Production will close on Sept 15. This year may be the last generation of Huawei Kirin high-end chips.” This essentially means that Huawei’s upcoming flagship Mate 40 could be the last Huawei device that comes with its in-house chipset.
That’s bad news for Huawei, but how exactly did it get to this point? Well, the US (Trump, more like it) has been accusing the company of building backdoors into its network infrastructure so that the Chinese government can spy on Americans. Of course, Huawei has denied all accusations but it’s still been unable to shed the perception that Huawei is the Chinese government.
The amended export rule could just be the ammo that Trump had originally intended to have with the introduction of the ban. It prevents even foreign manufacturers of semiconductors from doing business with Huawei if these manufacturers utilise American software and technology in their operations without first obtaining a licence.
Huawei still had a good quarter and actually shipped more phones than Samsung and any other smartphone company in the world between April and June, but with their ability to make their own chipsets severely compromised, things could start to change as early as Q2 next year.