Preparing a day when it could no longer count on buying US parts and components, Huawei begins to store about a year's worth of certain components. This turned out to be the right thing to do in light of the Trump administration's decision to place the company on the trading department's entity list. After the current three-month temporary license expires, Huawei will need US government approval to obtain supplies from the states. And already chip-related companies like Qualcomm, Intel, Xilinx, Qorvo and ARM Holdings have announced that they have cut ties with the Chinese manufacturer.
According to a report by CLSA (via Yahoo), Huawei's decision to add up components will help create "false demand" for semiconductors. CLSA analyst Sebastian Hou estimated that Huawei's purchases increased by 8% to revenue growth in the chip industry in the first quarter. Hou says that Huawei's removal from the market in the current quarter will result in a 4% decline in chip revenue. This is because Huawei (not including the purchases made to build inventory) normally accounts for 8% to 9% of the chip market, and half of the quarter is over.
The analyst says that the impact of Huawei's absence from the chip market will be more difficult to estimate after this quarter. This is because the company could find itself doing business as usual if the US and China agree on a new trade pact; Only today, President Donald Trump said the US could use Huawei as a negotiating chip to pull out better terms from China in future trade negotiations. This means that any Huawei projection must be taken with salt grains. As bad as things now look to Huawei, the situation can change 1
80 degrees in the heart.
Huawei could only send 157 million phones this year against a target of 250 million units
What Huawei must be concerned about is what it will do in the future after using up all of its components has saved Hou says Huawei could be in big trouble before the turn of the year. "Before the end of this year, they will use all the critical components," the analyst noted. "If the ban is not lifted then, they will be in trouble." The company spent $ 11 billion to buy US shares last year and is obviously more dependent on US suppliers than many believed. CLSA estimates that the company is responsible for the development of one-third of the components and parts it uses in the smartphones. Earlier, Huawei has said it wants to get that number up to 90%. Hou is also wondering about Huawei's internal replacement for Android, expected to debut this fall. He asks, "If they are ready, why don't they use it now? Why are they waiting for things to happen?" The new operating system could be launched with the Huawei Mate 30 series, which was later released later.
Huaweis Kirin 980 SoC was most likely developed by American software
Huawei was on its way to becoming the largest smartphone manufacturer in the world next year after completion of the first quarter of this year in second place behind Samsung. Fubon Research and Strategy Analytics expects that the company's smart phone deliveries will fall anywhere between 4% and 24% in 2019. Given that last year the company delivered approx. 206 million phones, the worst case presented by the two research communities would put Huawei's shipments at 157 million units this year, just over 2017 a total of 153 million units. The company had hoped to send 250 million phones this year. Huawei is also the world leader in networking equipment. Several countries, including the United States, Australia, Japan and New Zealand, have banned wireless providers in their country from using Huawei's equipment.