Huawei in panic mode because of US embargo
According to sources in the supply chain, the Chinese manufacturer Huawei has again significantly expanded the supply of smartphones and other components from products of American partners. They currently have reserves for up to two years.
According to the Japanese business service Nikkei Asian Review, citing sources from the closest environment of Huawei, the company increased the number of stored components as a result of the US embargo and the recent tightening. Most recently, it was said that Huawei should have spare parts for a year.
Meanwhile, they say that even more were purchased, so components and products of a different type are now available for the production of new devices for up to two years. Just last week, Huawei announced that $ 21.1 billion worth of spare parts, materials. And microchips were purchased for storage in 2019, up 73 percent from the previous year.
Huawei mainly hoarded FPGA and server chips
According to the report, component inventory is mainly purchased by chips from US manufacturers Xilinx, Intel, and AMD. For Huawei, Xilinx FPGA chips are especially important for use in cell phone base stations, as they are freely programmable and used in various products of the Chinese group. Outside the US, there are simply no alternative suppliers of such high-performance FPGAs.
In addition, Huawei is also trying to hide the server processors Intel and AMD. Because only with them can be equipped with various server systems manufactured by the company. Since AMD and Intel together account for about 98 percent of the global server processor market. There is simply no real alternative for Huawei in this case, so one depends on two US companies.
Huawei also buys various storage products from the warehouse. It including RAM and flash memory, from manufacturers such as Samsung, SK Hynix, Micron, and Kioxia. And is also trying to guarantee future contractual availability of products. This is primarily due to the fact that Huawei is internally afraid of the expansion of US sanctions. Which could lead to the termination of the supply of memory modules by the company.
So far, China does not have its own production of competitive products of this type. However, Huawei can save components from problems only for a limited time. As products are constantly evolving, products in the warehouse, as a rule, are no longer updated for several years. And turnkey systems equipped with them are no longer fully competitive.
Sanctions extended: Huawei another year without Google apps
US President Donald Trump extends the “national emergency” and sanctions against Chinese manufacturer Huawei for another year. With some exceptions, the Group’s Android smartphones will continue to do without Google services and applications.
In a trade dispute between the United States and China. The embargo on corporations such as Huawei is expanding. In a White House report. Donald Trump said between the lines that restrictions on cooperation between the US and Chinese companies will continue for another year. New releases and flagships for smartphones. Such as the Huawei P40 Pro and Mate 30 Pro. Which will still ship with Android 10 (EMUI 10) but will have to do without Google applications such as Maps, Gmail, and Co., as well as the Play Store which is especially important for many markets.
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