Chinese consumers are rushing to buy smartphones from Huawei Technologies Co (華為) featuring its high-end Kirin chips, fearing that curbs on the firm’s access to US technology would soon cut off production of its premium handsets.
Phone vendors in Huaqiangbei in Shenzhen, the world’s largest electronics market, said that prices for new and used Huawei phones had risen steadily over the past month by about 400 to 500 yuan (US$59.12 to US$73.90) on average.
The Porsche design model of Huawei’s flagship Mate 30 was selling for 14,000 yuan, from 10,000 yuan in January, one vendor said.
Photo: Reuters
The phone was available at a similar price on online marketplace Taobao (淘寶).
The US government last year moved to prevent most US companies from conducting business with Huawei, saying that the world’s biggest maker of mobile telecommunications equipment and smartphones was ultimately answerable to the Chinese government.
Huawei has repeatedly denied being a national security risk.
Last month, the US further tightened restrictions to choke the firm’s access to commercially available chips, prompting Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) to stop shipping wafers to Huawei.
Huawei chief executive of consumer business Richard Yu (余承東) subsequently said that the company would stop making its Kirin chips on Tuesday because of US measures to cut off its chipmaking unit HiSilicon Technologies Co (海思半導體) from vital technology.
HiSilicon relies on software from US firms such as Cadence Design Systems Inc and Synopsys Inc to design its chips, and outsources production to TSMC, which uses US-made equipment.
Wholesale traders at the market said that they had been busy for the past month meeting extra demand for online sales, with prices of higher-end phones rising every few hours.
They were uncertain how much supply remained at distributors.
Huawei does not disclose inventory information.
A company spokesman told reporters that the firm continues to operate according to demand.
It likely has chip inventory to last through the first half of next year, International Data Corp analyst Will Wong said.
“One option for them to have Kirin chips last longer is to ship less for the rest of the year,” Wong said.
In related news, companies that supply the chip sector with sophisticated and expensive equipment plan to warn US President Donald Trump’s administration against a proposal to blacklist China’s top chipmaker, Semiconductor Manufacturing International Corp (SMIC, 中芯國際), arguing that it would be “detrimental” to US industry.
The companies are represented by the semiconductor and electronics manufacturing suppliers, industry group SEMI, which drafted a letter that could be sent as soon as this week to US Secretary of Commerce Wilbur Ross.
In the draft letter, the group wrote that blacklisting SMIC would jeopardize the US’ technological edge by making it harder for US companies to supply the company, which accounts for as much as US$5 billion in annual US-origin equipment and material sales.
They also said that such a move would “contribute to a growing perception” that the delivery of US goods is “unreliable” and hit US market share worldwide.
“We urge the [US] Department [of Commerce] to carefully consider the immediate and long-term detrimental impacts to US industry, economic and national security that may result from the addition of SMIC to the Entity List,” said the group, which has 2,400 members worldwide, including SMIC and US chip equipment makers Lam Research Corp and Applied Materials Inc.
The department did not immediately respond to a request for comment.
SEMI vice president of global public policy Joe Pasetti said: “We don’t comment on draft letters leaked to the press.”
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