Chinese tech giant Huawei Technologies Co (華為) is running out of processor chips to make smartphones due to US sanctions and would be forced to stop production of its own most advanced chips, a company executive has said, in a sign of growing damage to Huawei’s business from US pressure.
Huawei, one of the biggest producers of smartphones and network equipment, is at the center of US-Chinese tension over technology and security.
Washington last year cut off Huawei’s access to US components and technology, and those penalties were tightened in May, when the White House barred vendors worldwide from using US technology to produce components for Huawei.
Photo: AP
Production of Kirin chips designed by Huawei’s own engineers would stop on Sept. 15 because they are made by contractors that need US manufacturing technology, said Richard Yu (余承東), president of the company’s consumer unit.
Huawei lacks the ability to make its own chips, he said.
“This is a very big loss for us,” Yu said on Friday at the China Info 100 industry conference, according to a video recording of his comments posted on multiple Web sites.
“Unfortunately, in the second round of US sanctions, our chip producers only accepted orders until May 15. Production will close on Sept. 15,” Yu said. “This year may be the last generation of Huawei Kirin high-end chips.”
More broadly, Huawei’s smartphone production has “no chips and no supply,” Yu said.
Yu said this year’s smartphone sales probably would be lower than last year’s level of 240 million handsets, but gave no details.
Huawei has denied accusations that it might facilitate Chinese spying.
Chinese officials have accused Washington of using national security as an excuse to stop a competitor to US tech industries.
Huawei is a leader among emerging Chinese competitors in telecoms, electric vehicles, renewable energy and other fields. The company has 180,000 employees and one of the world’s biggest research and development budgets at more than US$15 billion a year.
However, like most global tech brands, it relies on contractors to manufacture its products.
Earlier, Huawei announced that its global sales in the first half of this year rose 13.1 percent from a year earlier to 454 billion yuan (US$65 billion).
That was due to strong sales of high-end products, Yu said.
Huawei became the world’s top-selling smartphone brand in the three months ending in June, passing rival Samsung Electronics Co for the first time due to strong demand in China, according to Canalys.
Sales abroad fell 27 percent from a year earlier.
Separately, Qualcomm Inc has been putting pressure on US President Donald Trump’s administration to allow it to sell components to Huawei, saying that the restrictions risk channeling revenue to foreign competitors rather than preventing the Chinese company from obtaining the parts, the Wall Street Journal reported on Friday.
The US chipmaker is lobbying to be permitted to sell chips to Huawei that would be used in 5G smartphones, the newspaper reported, citing a presentation it says has been “circulating around Washington” and without specifying how it obtained the document.
US chipmakers are required to obtain a license from the US Department of Commerce to ship certain components to Huawei.
Qualcomm said that, due to the restrictions, its foreign competitors now have access to a market worth as much as US$8 billion each year.
It cited MediaTek Inc (聯發科) and Samsung as those benefiting from the redirected revenue stream.
MediaTek said its investment in 5G technology has allowed it to win customers globally. It declined to identify specific companies.
Additional reporting by Bloomberg
ARTIFICIAL INTELLIGENCE: The chipmaker last month raised its capital spending by 28 percent for this year to NT$32 billion from a previous estimate of NT$25 billion Contract chipmaker Powerchip Semiconductor Manufacturing Corp (力積電子) yesterday launched a new 12-inch fab, tapping into advanced chip-on-wafer-on-substrate (CoWoS) packaging technology to support rising demand for artificial intelligence (AI) devices. Powerchip is to offer interposers, one of three parts in CoWoS packaging technology, with shipments scheduled for the second half of this year, Powerchip chairman Frank Huang (黃崇仁) told reporters on the sidelines of a fab inauguration ceremony in the Tongluo Science Park (銅鑼科學園區) in Miaoli County yesterday. “We are working with customers to supply CoWoS-related business, utilizing part of this new fab’s capacity,” Huang said, adding that Powerchip intended to bridge
purpose: Tesla’s CEO sought to meet senior Chinese officials to discuss the rollout of its ‘full self-driving’ software in China and approval to transfer data they had collected Tesla Inc CEO Elon Musk arrived in Beijing yesterday on an unannounced visit, where he is expected to meet senior officials to discuss the rollout of "full self-driving" (FSD) software and permission to transfer data overseas, according to a person with knowledge of the matter. Chinese state media reported that he met Premier Li Qiang (李強) in Beijing, during which Li told Musk that Tesla's development in China could be regarded as a successful example of US-China economic and trade cooperation. Musk confirmed his meeting with the premier yesterday with a post on social media platform X. "Honored to meet with Premier Li
Dutch brewing company Heineken NV on Friday announced an investment of NT$13.5 billion (US$414.62 million) over the next five years in Taiwan. The first multinational brewing company to operate in Taiwan, Heineken made the statement at a ceremony held at its brewery in Pingtung County. It also outlined its efforts to make the brewery “net zero” by 2030. Heineken has been in the Taiwanese market for 20 years, Heineken Taiwan managing director Jeff Wu (吳建甫) said. With strong support from local consumers, the Dutch brewery decided to transition from sales to manufacturing in the country, Wu said. Heineken assumed majority ownership and management rights
Microsoft Corp yesterday said that it would create Thailand’s first data center region to boost cloud and artificial intelligence (AI) infrastructure, promising AI training to more than 100,000 people to develop tech. Bangkok is a key economic player in Southeast Asia, but it has lagged behind Indonesia and Singapore when it comes to the tech industry. Thailand has an “incredible opportunity to build a digital-first, AI-powered future,” Microsoft chairman and chief executive officer Satya Nadella said at an event in Bangkok. Data center regions are physical locations that store computing infrastructure, allowing secure and reliable access to cloud platforms. The global embrace of AI