Home / Business / Huawei built a chip inventory for a year, pending a ban

Huawei built a chip inventory for a year, pending a ban

Huawei prepares for a day when it is no longer possible to procure US parts and components, and begins stocking some of the components worth about a year. This proved correct given the Trump Administration's decision to put the company on the Entities List of the Commerce Department. Upon expiration of the current three-month temporary license, Huawei requires US government approval to obtain supplies from the states. And chip-based companies such as Qualcomm, Intel, Xilinx, Qorvo and ARM Holdings have already announced that they have cut back on their relationship with the Chinese manufacturer.

According to a report by CLSA (via Yahoo), Huawei has decided to supply itself with components that helped create "fake demand" for semiconductors. CLSA analyst Sebastian Hou found that the Huawei acquisition contributed 8% to the growth in the chip industry in the first quarter. According to Hou, Huawei's exit from the market in the current quarter will lead to a 4% drop in chips sales. This is because Huawei (excluding stockpile purchases) typically accounts for 8% to 9% of the chip market, and half the quarter is over, which will be harder to predict after this quarter. This is because the company could do its business as usual when the US and China agree to a new trade pact. Recently, President Donald Trump said the US could use Huawei as a negotiating tool to get better terms from China in future trade negotiations. This means that every projection made via Huawei must be taken with a grain of salt. As bad as Huawei looks now, the situation could change 1
80 degrees right now.

Huawei shipped only 157 million handsets this year, compared to a target of 250 million units.

What Huawei has to keep in mind is what it will do in the future when all the components it has consumed are kept. According to Hou, Huawei may have big problems before the end of the year. "This year, all critical components will be used up," said the analyst. "If the ban is not lifted by then, they'll be in trouble." The company spent $ 11 billion last year buying parts, and is obviously more dependent on American suppliers than many thought. CLSA estimates that the company is responsible for developing one-third of the components and parts it uses in its smartphones. Earlier, Huawei announced that this number should be raised to 90%. Hou also wonders about Huawei's in-house Android replacement, which is expected to be released in the fall. He asks, "If they are ready, why not use it now, why wait for something to happen?" The new operating system could be introduced with the Huawei Mate 30 series, which will be released later this year.
  Huawei's Kirin 980 SoC was most likely developed in the US Software

Huawei's Kirin 980 SoC was most likely developed with software from the US

Huawei was on its way to becoming the largest smartphone after the first quarter ended Manufacturer of the world to be this year in second place behind Samsung. Fubon Research and Strategy Analytics expect the company's smartphone shipments to decline between 4% and 24% in 2019. Given that the company delivered around 206 million handsets last year, the Huawei scenario would be the worst case, with deliveries slightly above the 2017 level of 157 million units this year (153 million units). The company had hoped to deliver 250 million handsets this year. Huawei is also the world's leading provider of network devices. Several countries, including the US, Australia, Japan and New Zealand, have banned mobile operators in their country from using Huawei devices.

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