From April through June, Huawei became the biggest smartphone manufacturer in the world surpassing rival Samsung according to Canalys, this may be the last success the company will enjoy in a long time as they will no longer be able to produce their in-house Kirin chipsets from next month according to a report by The Associated Press.
Huawei’s troubles with the US government is well documented. In May 2019, the US government blacklisted the Chinese company meaning US companies can no longer trade with Huawei without an explicit approval from the government. The US government granted Huawei a temporary 90-day license which meant it was free to trade with US companies again earlier this year as long as a threat is not posed to national security.
The US government sees Huawei has a threat to natural security and the restrictions have since been tightened. Huawei is not permitted to work with US companies including Google who owns the Android OS. In February, the US government drafted a proposal which was aimed at stopping TSMC from manufacturing Huawei’s Kirin chipsets. According to Richard Yu, president of Huawei’s consumer unit, production of Kirin chipsets will now stop September 15th because they are made by contractors who makes use of US technology.
“This is a very big loss for 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. This year may be the last generation of Huawei Kirin high-end chips,” said Yu at an industry conference on Friday.
The US government is putting a lot of pressure on other Chinese owned companies. TikTok owned by ByteDance Ltd. is under pressure to sell the popular app while President Donald Trump has also placed a ban on unspecified transactions on popular messaging app, WeChat.
Yu expects smartphone sales this year for Huawei to be much lower than the 240 million units it achieved in 2019.
With Huawei being unable to produce its own Kirin chipsets, it’s been reported Qualcomm is trying to persuade the US government to let it sell chips to Huawei.