Huawei is facing a critical shortage of smartphone chips as a result of pressure from the US.
In the aftermath of concerted efforts by US officials to isolate Huawei, the company is reporting that it is running out of smartphone chips and will soon have to stop production of its own Kirin chips, according to The Associated Press.
Officials have maintained that Huawei represents a national security threat to the US and its allies. Among other things, there have been concerns over the unusually close ties between Huawei officials and Chinese intelligence. The US has banned Huawei and pressured allies to do the same.
The US Commerce Department even modified the Entity List and Foreign Direct Product Rule to restrict Huawei’s access to needed technology. The Entity List and Foreign Direct Product Rule prohibits companies from buying products containing US technology, even if the manufacturer is a foreign company. This rule enabled the US to cut off Huawei from TSMC, one of their primary chip suppliers.
Like Apple, Huawei uses outside contractors to manufacturer their chips. Being cut off from those contractors means the company is losing the ability to continue manufacturing them.
“Unfortunately, in the second round of U.S. sanctions, our chip producers only accepted orders until May 15. Production will close on Sept. 15,” said Richard Yu, president of the company’s consumer unit. “This year may be the last generation of Huawei Kirin high-end chips.”