A Huawei executive revealed that the Chinese tech giant is running out of chips to make cell phones due to US sanctions.
The executive added that production of Huawei’s most advanced chips will have to halt next month because its contractors are unable to use US-made technology, in an indication of growing damage to Huawei’s business from US pressure.
Huawei Technologies Ltd., one of the largest producers of cell phones and networking equipment, is at the center of the tension between the United States and China over technology and security issues. The binational dispute has recently spread to include the popular video app TikTok and the Chinese-owned messenger service WeChat.
Washington last year blocked Huawei’s access to American components and technology, including Google music and other services. Those sanctions were tightened in May, when the White House banned suppliers around the world from using American technology to produce components for Huawei.
Production of so-called Kirin chips, designed by Huawei’s own engineers, will stop on September 15 because they are made by contractors who need American technology, said Richard Yu, chairman of the company’s department focused on consumers in general. He said Huawei lacks the ability to make its own microprocessors.
“This is a very big loss for us,” Yu told an industry conference, China Info 100, on Friday, according to a video recording of his comments posted on various websites.
“Unfortunately, in the second round of US sanctions, our chip producers only accepted orders until May 15. Production will close on September 15, ”Yu said. “This year may be the last generation of high-end Huawei Kirin chips.”
More broadly, Huawei’s phone production “has no chips and no supply,” Yu said.