Huawei has stocked up on enough chips and components to support its HiSilicon chip division through two years of core products. That's according to a recent report from Huawei Advisor. And the company also reportedly has enough stockpile to get through a half-year of non-core business. That includes "foreign business, mobile phones, set-top boxes, and other products.
The move follows an expansion of US sanctions that prevent the company from obtaining core components from many suppliers. With the sanctions in place, Huawei has increasingly been forced to turn inward, looking to Chinese OEMs for components and parts. But those challenges could be met and overcome if the report is accurate.
Huawei will take advantage of its two-year stockpile to build its own IDM
The primary driving force behind the Hauwei stockpile, which will reportedly last for two years in terms of chips for networking equipment, is a wider push for complete independence. Huawei is, reports indicate, looking to build out its own IDM.
For clarity, that's an integrated device manufacturer — a semiconductor company that designs, manufactures, and sells its own integrated circuits. That's from start to finish and would remove a big stumbling block for the company. The sanctions only impact Huawei's ability to source components from other OEMs.
By building out its own IDM, the company would be able to take its chips from design through sales. Right now, it effectively just designs the hardware.
Potential partners for the move have reportedly included the likes of Samsung, MediaTek, and others. And the overall goal is to gradually move production to the Huawei IDM from partners.
Huawei reportedly believes its two-year stockpile is enough to last through the build-out of its own IDM.
Huawei will still face challenges here
As of this writing, Huawei has effectively positioned itself as a top global smartphone manufacturer. For at least a couple of months this year, it was the top OEM. That's despite the sanctions mentioned above. But it has faced a number of challenges on that front and, as also noted above, this doesn't necessarily fix that.
As stated already, the company's plan only takes it through two years in terms of its core products. And that's networking equipment, not phones. It only has confidence that its phone stockpile will take it through a half of a year. And the company is facing challenges partnering to build out 5G networks as a direct result of sanctions too. So, even with two years of chips stocked up, Huawei is not quite out of the frying pan just yet.