Huawei's supply chain 'attacked', says chairman

Ruben Fields
September 27, 2020

The Chinese vendor has been hit with various U.S. sanctions in the a year ago and is now unable to procure components from USA firms or companies that rely on United States technology unless they have obtained a concession.

Speaking to reporters in Shanghai at annual Huawei Connect conference, chairman Guo Ping said the Chinese company still wants to do business with United States companies.

It understood that suppliers such as Qualcomm QCOM.O were applying for USA licences which would allow them to continue serving Huawei, he added.

However, Huawei's chairman said on Wednesday that the business has "sufficient stock" of components to continue operating, despite USA sanctions.

In the next phase, he said, Huawei will work with its partners to apply ICT technologies to industries, helping enterprises grow their businesses and helping governments achieve their strategic goals of boosting domestic industry, benefiting their constituents and improving overall governance. There's "sufficient stock" for B2B divisions like networking equipment, but Guo didn't comment on smartphone supplies. Analysts are divided on how long Huawei's pile of smartphone chips will last, but it is expected to run out after the first quarter of next year - long after the US election on November 3.

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The company urged the U.S. to reconsider the rules, which make it hard for Huawei to buy essential parts for products such as phones. So it will not be a surprise to see Qualcomm chipsets in Huawei's phones in the future. SMIC uses USA -origin equipment to make chips for Huawei and other companies.

Intel has said it has received licenses to supply certain products to Huawei.

"The U.S. ban brings tremendous trouble in operation and production", Guo said. Analysts anticipate its current supply of Kirin chips will go out next year. He said that at present, American manufacturers are trying to obtain licenses for cooperation between companies, but have not yet achieved success. Huawei had yet to see any adverse impact on its global 5G business from the USA programme, he added. Richard Yu, the company's consumer group chief, acknowledged at an event earlier this month that curbs on chip supplies have affected smartphone shipments, which were 105 million units in the first half of 2020 after reaching 240 million in 2019.

"As Alexandre Dumas said, all human wisdom is summed up in these two words: wait and hope", he said, quoting from The Count of Monte Cristo, a 19th-century novel about the eponymous count who gets revenge against those who conspired against him.

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