The world’s biggest smartphone vendor is facing a huge problem that threatens to cripple the company. Huawei says it is running out of processor chips for its smartphones as a result of US sanctions against it.
According to Richard Yu, CEO of Huawei’s consumer business unit, the Chinese tech giant will no longer be able to make its own Kirin chipsets because of the ongoing economic sanctions from the US.
“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,” Yu said at a conference on 7th August 2020.
The immediate implication is that it’s Mate 40 phone could be the last Huawei smartphone with a Kirin chip. Huawei plans to release the smartphone in September 2020.
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The Trump administration accuses Huawei of helping the Chinese government commit espionage. A charge the company repeatedly and strongly denies. The US says the company has also been building backdoors into network infrastructures to commit the crime.
In May 2019, the Trump administration placed Huawei and 114 of its affiliates on an Entity List. The action meant that US firms cannot sell technology to the company without government approvals. As a consequence, Huawei couldn’t get an Android license for its devices, meaning its devices couldn’t use Google apps.
In May 2020, the US Commerce Department amended an export rule to block shipments of semiconductors to Huawei. The amendment was designed to “strategically target Huawei’s acquisition of semiconductors that are the direct product of certain US software and technology.”
This meant that foreign manufacturers of semiconductors that use American software and technology in their operations cannot ship or supply their products to Huawei without a license from the US.
Despite the sanctions, Huawei still shipped more phones than Samsung in the second quarter of 2020. Huawei has often come up with solutions for each of its problems and it will be interesting to see how it tackles this scarcity of processor chips for its smartphones.
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