Its suppliers are allowed to honor previous orders, but they must be shipped by midnight on September 14. This means the deadline is just three weeks away.
Huawei is in a chaotic state right now
Per the new report, the company is currently in survival mode and is trying to stockpile crucial components such as 5G mobile processors, Wifi, and display driver chips from companies including MediaTek, Novatek, RichWave, and Realtek.
Memory chip makers such as Samsung and SK Hynix and camera lens suppliers like Largan Precision and Sunny Optical Technology also hope to ship products to Huawei by September 14.
All of these companies use American technologies and software to manufacture products and thus, they must comply with the ban.
To meet the deadline, some suppliers might even deliver half-finished products that have not been tested or assembled.
One person who is privy to the matter said:
It’s not unusual for Huawei to call suppliers at 4 a.m. or have conference calls at midnight recently. Huawei is in a chaotic survival mode now, and changing its own plans constantly recently.
Once Huawei runs out of these components, its smartphone shipments could fall as much as 75 percent. The company is currently desperate to secure high-end 5G-enabled chips. Its stockpile is expected to run out by Q1 2021.
Thanks to its inventories, the company could ship around 195 million smartphones this year, according to GF Securities’ analyst Jeff Pu. If the US doesn’t soften its stance against the manufacturer, sales could fall to 50 million units in 2021.
Previously, the company was hoping to sell 130 million 5G smartphones in 2021, according to the semiconductor research company Isaiah Research.
Huawei will lose its competitiveness without Kirin chips
The ban is also expected to change the landscape of China’s smartphone market next year.
Huawei currently dominates the domestic market, but it is expected to lose 30 percent of its share to local rivals like Oppo, Vivo, and Xiaomi next year. Globally, Samsung and Apple will probably be the biggest beneficiaries.
Chinese chipmaker Unisoc Technologies could scoop up HiSilicon’s share in the long run.
As for Huawei, it will have to think of a long term plan to survive without US technology.
In the near future, we will likely see the company reorganize and scale down operations to stay profitable. Side by side, US companies like Qualcomm will probably continue to lobby against the restrictions.
