Huawei to stop smartphone chip production because of U.S. sanctions

09 Aug 2020 10:51 AM
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Chinese telecom giant Huawei said production of its most advanced smartphone chips would stop in September because of U.S. sanctions, creating a "huge loss".

Huawei -- the world's biggest producer of telecoms networking equipment -- has turned into a pivotal issue in the geopolitical standoff between Beijing and Washington, which claims the firm poses a substantial cybersecurity threat.

Huawei CEO Yu Chengdong told a tech industry forum on Friday that production of the company's high-end Kirin 9000 chipset would stop from September 15, because of U.S. sanctions.

Washington cut off Huawei's usage of U.S. pieces and technology including Google's music and other smartphone services this past year.

Those restrictions were tightened in May when the White House barred vendors worldwide from using U.S. technology to produce components for Huawei.

Taiwan Semiconductor Manufacturing Co. (TSMC) which includes been making Kirin 9000 chips using U.S. equipment has stopped taking orders from Huawei since May, fearing possible repercussions.

Huawei doesn't have the capability to manufacture the chips, which were found in its high-end smartphones.

"Huawei's mobile phones have no chip supply, which makes our shipment volume this season a little significantly less than 240 million units (shipped last year)," Yu said. "This is a huge loss for all of us."

Washington in addition has waged a diplomatic campaign to isolate the Chinese company, which includes emerged as a front-runner in the global race to roll out 5G telecom infrastructure.

The British government bowed to growing U.S. pressure and pledged earlier this month to remove Huawei from its 5G network by 2027, despite warnings of retaliation from Beijing.

Australia and Japan also have taken steps to block or restrict the Chinese company's participation within their 5G rollouts, while European telecoms operators including Norway's Telenor and Sweden's Telia have passed over Huawei as a supplier.