With the US deadline fast approaching, Huawei and its suppliers are rushing to meet the shipping goals for mobile chips for the Chinese tech giant. An industry source close to the matter has revealed that the company is fighting for survival after pressures from recent US sanctions.
According to a Nikkei report, Huawei Technologies is stockpiling 5G mobile processors, WiFi, radio frequency, display drivers, and other key components from chip developers. The suppliers include major names like MediaTek, Realtek, Novatek RichWave, and more. The race to meet the shipping goals arrives as the US deadline is right around the corner.
For those unaware, the US government had previously announced on 17th August 2020 that foreign chipmakers are banned from supplying chips that use American technology to the Chinese smartphone maker. To do so, one must acquire a special license issued by the government. However, to account for existing orders, the suppliers were permitted to complete such transactions but with a deadline that lasts only till midnight of 14th September 2020, which is less than a month away now.
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Analysts have predicted that Huawei’s smartphone shipments could possibly fall by as much as 75 percent next year if it runs out of these crucial parts. Thus, to meet the tight schedule and deadline, chipmakers have agreed to ship half-finished products or wafers that have note been tested or assembled. Generally, complex integrated circuits built on to wafers which are then processed for packaging and testing when chips are made.
A source stated that “It’s not unusual for Huawei to call suppliers at 4 a.m. or have conference calls at midnight recently. Huawei is in a chaotic survival mode now, and changing its own plans constantly recently.” While another industry insider said that “We will fully comply with U.S. regulation but try to meet customer’s needs. … We have only three weeks left that we can ship products to Huawei, so we will ship some finished chip products as well as some half-finished products or chip wafers just out of the plant that have not yet been packaged and tested.”
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