Huawei says it’s running out of chips for its smartphones because of US sanctions

Huawei, the world’s biggest smartphone vendor, says it’s running out of processor chips because of US sanctions against the company, The Associated Press reported. And according to Richard Yu, CEO of Huawei’s consumer business unit, as of next month the Chinese phone manufacturer will no longer be able to make its own Kirin chipsets due to the ongoing economic pressure from the US.

“Unfortunately, in the second round of U.S. sanctions, our chip producers only accepted orders until May 15. Production will close on Sept. 15,” Yu said at a conference August 7th. “This year may be the last generation of Huawei Kirin high-end chips.” Huawei’s upcoming Mate 40 phone, scheduled for release in September, could be the last phone with a Kirin chip.

The US has accused Huawei of building backdoors into network infrastructure, ostensibly to aid Chinese government spying efforts. Huawei has denied the Trump administration’s accusations of spying. But the Trump administration placed Huawei and 114 of its affiliates on its Entity List in May 2019, which meant US firms were unable to sell technology to the company without explicit US government approval.

It also meant Google was barred from doing business with Huawei, preventing Huawei from being able to obtain an Android license and keeping Google apps off Huawei devices. The order used the International Emergency Economic Powers Act to justify the ban, and reads that “openness must be balanced by the need to protect our country against critical national security threats.”

Trump later extended the order to May 2021. Then in May, the US Commerce Department issued an amended export rule to block shipments of semiconductors to Huawei to “strategically target Huawei’s acquisition of semiconductors that are the direct product of certain US software and technology.”

That rule prevented foreign manufacturers of semiconductors who use American software and technology in their operations from shipping their products to Huawei unless they first obtained a license from the US. Taiwan Semiconductor Manufacturing Co. (TSMC), the largest semiconductor manufacturer in the world, reportedly halted orders for Huawei’s HiSilicon unit in May following the new US rule.

Despite the ban in the US, earlier this year, Huawei bested Samsung as the world’s biggest smartphone seller, shipping more phones between April and June than any other company, according to analyst firm Canalys.

The Wall Street Journal reported Saturday that American chipmaker Qualcomm had asked the Trump administration to ease the restrictions on the sale of components to Huawei, and allow it to sell chips to Huawei for use in its 5G phones.

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