Huawei Runs Out Of In-House Smartphone Chips Amid US Sanctions: Report

Chinese tech company Huawei has run out of in-house-designed semiconductors for its smartphones, according to a report in South China Morning Post (SCMP). The company is battling stiff US trade sanctions aimed at cutting Huawei's access to advanced new chips. The sanctions, imposed since 2019, are part of US pressure to remove Huawei, one of the world's largest suppliers of networking and 5G technology, from the markets and systems of allies. The US banned Huawei equipment in government use and discouraged its use in the commercial market. In May this year, Canada banned Huawei equipment from its 5G network.

The SCMP report said that Shenzen-based Huawei has struggled to get access to new in-house-designed integrated circuits (ICs) manufactured by some of the leading chip companies due to tightening of US sanctions.

"Based on our checks and sell-through data, Huawei has finished its inventory of HiSilicon chipsets," the outlet said, quoting a Counterpoint's latest report on global smartphone application processor market share.

HiSilicon's market share last year was three per cent, but dropped to zero in the third quarter of 2022, the report further said.

The company has not responded to the report.

Huawei, which operates in more than 170 countries, has been relying on off-the-shelf chips and stockpiled inventory to keep its flagship telecom equipment business on track, as per a Nikkei Asia report.

It partnered with some of the domestic chipmakers, also blacklisted by the US, to build production lines free from US interference, the Nikkei Asia report said.

Huawei received a massive blow to its smartphone business when the US government under then President Donald Trump blacklisted the company in 2019. The company's revenue fell by 2.2 per cent in 2022.

The company is said to have earned around $2.5 (approximately Rs 207 at current exchange rate) for every smartphone that used 5G technology developed by it.