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US sanctions halt production of high-end Huawei chipsets

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The Shenzhen-based telecommunications giant has said that manufacturing of its most advanced smartphone chipsets will end in September, due to the recent US sanctions.

Huawei, TikTok and other Chinese tech companies have found themselves at the centre of escalating trade disputes between the White House and Beijing.

In May, the US imposed new restrictions on Huawei to prevent it from using technology with American origins in their operations; commerce secretary Wilbur Ross said that this was to prevent the company from circumventing existing sanctions in place which preclude it from buying technology from American companies, such as Google apps.

The most recent restrictions have already had a noticeable impact on Huawei, with the UK government citing the sanctions as a key factor in its own decision to prevent Huawei participating in the UK’s 5G rollout.

Now, Richard Yu, the Huawei Consumer Group CEO, has told a tech forum that it will halt production of its Kirin 9000 chipset after 15 September, when the US restrictions come into force.

Kirin chips are designed by Huawei subsidiary HiSilicon and incorporated into its high-end smartphones. The current high-end chip – the Kirin 990 5G – is due to be replaced by the Kirin 9000 in Huawei’s next generation of flagship phones (the Mate 40 series, due to launch this autumn). This will result in limited supplies of the Mate 40 smartphones, which may be the last to feature a Kirin chipset.

Following the introduction of new restrictions this year, key Huawei supplier TSMC – which had been making Kirin 9000 chips using some US technology – stopped taking new Huawei orders. Huawei does not currently have the capacity to manufacture the chips itself and while Shanghai-based foundry SMIC has started manufacturing Kirin chips, it also lacks the capacity to produce state-of-the-art silicon.

“Huawei’s mobile phones have no chip supply, which makes our shipment volume this year a little less than 240 million units,” said Yu, according to reports. “This is a huge loss for us.”

Yu said that while Huawei had become a world-leading chip designer within a decade, the company had not invested heavily in semiconductor production: “We only did chip design, but skipped chip production”.

The Wall Street Journal reported this weekend that US chipmaker Qualcomm has requested that the White House eases restrictions against working with Huawei to allow it to sell 5G Snapdragon chipsets to Huawei. According to the report, Qualcomm argued that easing the ban could help US companies stay competitive.

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