Trump wins: Huawei will stop production of Kirin smartphones on 15th September

Huawei estimates that it will have exhausted its stocks of Kirin chip by September because it cannot obtain supplies from American sellers. The manufacturer is starting to be overtaken by the very harsh sanctions decreed by Washington.

Huawei has admitted that it will be out of stock of Kirin chip by September because it cannot source from US sellers. Washington started putting Huawei on the spot in May 2019 with the placement of the group, with ZTE and a handful of other legal and natural persons on the notorious “Entity List” . This prohibits Huawei from sourcing from American companies – except for temporary exemptions.

Huawei admits it will no longer be able to manufacture smartphones with Kirin chips as of September 15

Huawei is accused of posing a threat to the national security of the United States . And since then, despite some fleeting signs of easing, the US administration has continued to step up the pressure on the Chinese firm. The last measure, which is particularly harsh, prohibits all manufacturers using American equipment from supplying Huawei with chip for smartphones . This is how TSMC had to give up the manufacturer’s order book . And de facto, to date, the alternatives are very badly desired .

HiSilicon, Huawei’s silicon division, is not strictly speaking an “in-house” manufacturer. It relies on subcontractors to manufacture its chip with the latest engraving nodes. A possible alternative, the Chinese manufacturer SMIC, does not yet offer the 7 nm node which is now standard in the industry . And it is not certain that the latter does not use American equipment, which would de facto make it also fall within the scope of American sanctions.

At the time of the last round of sanctions, we were saying that Huawei could be forced to give up smartphones . The group has since given the insolent impression to the contrary, pushing its market share in many parts of the world . The manufacturer has used several tricks, such as the reissue of smartphones that were not yet targeted by sanctions. However, it appears that Huawei’s international business is starting to reach a dead end.

The president of the firm Richard Yu thus revealed on the sidelines of the China Info 100 conference that the production of Kirin chip will cease on September 15 due to lack of access to suppliers. The official believes that this is “a very heavy loss” : “Unfortunately, in the second round of US sanctions, our chipmakers only accepted orders until May 15th. Production will cease on September 15. This year could be the last generation of high-end Huawei Kirin chip”.

There is still some hope

He points out that the manufacturer has ” no more chip or supply” for its smartphones. Richard Yu adds that he expects smartphone sales to drop below 240 million units – the 2019 level – this year. It remains to be seen how long Huawei will stop production. At this stage, the situation does indeed seem very closed, but it is not impossible that Huawei will eventually find a lifeline .

Moreover, in the United States certain large groups such as Qualcomm continue to put pressure on the White House so that the sanctions against the firm are reduced. The manufacturer is de facto excluded from a market which represents 8 billion dollars per year. And it’s not impossible that competitors like Samsung and MediaTek will end up turning the situation to their advantage. Especially if the tenant of the White House changes during the November elections and the American position changes a bit …