Things are extremely hectic between the US and China, and Huawei is still stuck in the epicenter of all of it. While the US ban has had fairly harrowing effects on the company, they’ve also been prepared for it and have take countermeasures against it. One of these countermeasures apparently was to buy enough chip stocks to last them an entire year.
Huawei had informed its global suppliers six months ago that it wanted to build up a stock of crucial components that would last for up to a year, in preparation for trade war uncertainties. The Chinese giant was also making moves to secure new sources that wouldn’t be affected by a US embargo. Another option in the works is to ramp up efforts at becoming more self-reliant, which may bear fruit fairly soon.
Plans cut across several key components, extending beyond chips to include passive components and optical parts. For some components that are subject to higher risks of export controls, Huawei has stockpiled six months’ to more than a year’s worth of supply, while holding at least three months’ worth of less crucial ones, the sources said.
Analysts claim that the impact of Huawei’s absence from the chip market will be harder to estimate after this quarter. That is because the company could find itself doing business as usual if the U.S. and China agree to a new trade pact; just the other day, President Donald Trump said that the U.S. might use the “dangerous” Huawei as a bargaining chip to extract better terms from China during future trade negotiations.
In addition, Huawei which is currently the world’s second-largest smartphone vendor reportedly started certifying more chips, optical components, camera-related technologies and other parts suppliers based outside the US at the beginning of this year. The US may also try to get allies to get companies domiciled in their countries to ban sales of components to Huawei.
