Huawei became the world’s top smartphone vendor in Q2.
But there was no time to celebrate, because U.S. sanctions are taking their toll. A Huawei exec said Friday the company has “no chips and no supply.” On Sept. 15, it will terminate production of premium Kirin chips, which are made by contractors who use U.S.-origin manufacturing technology.
It’s not clear what comes next. But let’s use our imagination:
- Huawei offers soup-to-nuts telecom infrastructure. Its 5G gear sales could partially offset its smartphone woes, as demand climbs in China and countries outside Washington’s sphere of influence.
- Huawei spends $15 billion annually on R&D, with plenty earmarked for chip development.
- There’s also outside help: China is heavily subsidizing chip R&D in its bid to establish technological self-sufficiency. The country is said to have roughly 1,300 fabless chipmakers.
Bottom line: Self-sufficiency doesn’t happen overnight. Since Huawei is depleting its hardware stockpile, it may not be the No. 1 global smartphone vendor for long.
+ While we’re here: Qualcomm lobbyists are working the phones in D.C., seeking a license to sell 5G parts to Huawei, per the WSJ.