Huawei to stop producing its Chips due to US sanction

 

Huawei Technologies Co [HWT.UL] will be stopping the production of its flagship Kirin chip sets on September next month , reported by financial magazine Caixin said on Saturday.

US sanction on Huawei is starting to bite harder therefore affecting the company's production of chipsets used in manufacture of its smartphones and network equipment. The US government is mounting a lot of pressure on Huawei's suppliers making it more harder for the company's Hisilicon chip division  to keep making the chipsets which is a key component for its smartphone.

When the US-China relations started getting low, Washington put sanctions on Chinese Tech-giant Huawei blaming the company of spying on Americans on behalf of communist party government of China. Huawei however denied this allegation of spying for China in America.

In May this year, the U.S. Commerce Department issued orders that required all suppliers of software and manufacturing equipment to refrain from doing business with Huawei without first obtaining a license even though the supplier is not in US but as long as they are using US technology. This meant that, even all Huawel's suppliers who are outside of US but are using US software or equipement can not do any sort of business with Huawei without getting a license from the US government.

 Richard Yu, CEO of Huawei’s Consumer Business Unit was quoted to have said 

"From Sept. 15 onward, our flagship Kirin processors cannot be produced,” Yu said, according to Caixin. “Our AI-powered chips also cannot be processed. This is a huge loss for us.”

Huawei’s HiSilicon division deeply relies on software produced by U.S. companies such as Cadence Design Systems Inc or Synopsys Inc to design its chips and it also outsources the production to Taiwan Semiconductor Manufacturing Co (TSMC), which uses equipment from U.S. companies, therefore can no longer do business with Huawei.

 

Huawei's HiSilicon produces a wide range of chips such as Kirin processors, which power only Huawei smartphones and are the only Chinese processors that are of high quality compare to US chip producers like Qualcomm.

 

Recently, Huawei has merged to become biggest smart phone seller beating even Korean company Samsung as well US company Apple Inc but this can be turn to trash quickly if Huawei has not come out with the way forward to tackle its problems.

Washington has been working hard to convince more countries to kick out Huawei from rolling their 5G network which the next generation of internet. At the same time the US is seeking the extradition from Canada of Huawei’s chief financial officer, Meng Wanzhou, on charges of bank fraud.