Shift. the Aug 28, 2020 at 17 h 00 min
Huawei is in dire straits. Deprived of an Android license and Kirin SoCs, the Chinese manufacturer is struggling to survive the restrictions imposed by the United States. In vain. If US sanctions are not lifted, smartphone sales could plunge 75% over the next year.
Donald Trump has toughened sanctions on Huawei. The new measures prevent the company from sourcing components from its usual suppliers. Deprived of the founder TSMC, Huawei will no longer be able to produce the Kirin SoCs that power its smartphones from September 2020. Under these conditions, several engineers from the manufacturer's Hilisilicon division have decided to slam the door. The situation is critical for Huawei.
On the same subject: Huawei promises to continue Android updates on its smartphones
At Huawei, it's chaos!
According to a new report from Nikkei, a Chinese business media, Huawei is currently storing as many mobile chips as possible before the restrictions come into effect on September 14, 2020. Once this deadline has expired, the company will no longer be able to place new orders for components. To meet Washington’s deadlines, some chip vendors even agreed to ship semi-finished, untested or not yet assembled products. "What they most desperately want are 5G smartphone SoCs and high-end smartphone chips." underlines an anonymous source.
“It's not unusual for Huawei to call suppliers at 4 a.m. or set up conference calls at midnight. Huawei is now in a chaotic survival mode and is constantly changing its own plans ” says a source familiar with the matter. Another testimony ensures that "Huawei is fighting for its survival" .
The group would thus have managed to amass a sufficient stock of network chips so that its equipment manufacturer activity survives the sanctions for years. Unfortunately, the situation is more delicate on the side of its mobile division. According to analysts interviewed by Nikkei, Huawei smartphone sales may collapse by 75% as soon as the stock of collected components is exhausted.
"Sales of the brand's smartphones for next year will not exceed 50 million units if the United States does not change or relax the rules" says Jeff Pu, analyst at GF Securities. Number 2 worldwide in the smartphone market, just behind Samsung, Huawei could tumble from its pedestal in the coming months.