Huawei Procuring Semi-Assembled Chips To Overcome The US Chip Ban

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The mounting US sanctions have led Huawei to more focusing on its survival than developing cutting edge technology. Moreover, the new amendments made by the US commerce department in May this year have forced TSMC to stop accepting new orders from Huawei. The US chip ban on Huawei comes into effect from September 15.

Though the new rule change will not affect the previous orders, they need to fulfill by midnight of September 14. According to a Nikkei Asian report, Huawei and its suppliers are working around the clock as the deadline is getting nearer.

US chip ban forces Huawei to fight for its survival

The company is mentioned to be stockpiling 5G mobile chipsets and other components from key suppliers including MediaTek, Realtek, Novatek, and RichWave. As per the source, the company is also buying semi-assembled products and that too without being tested.

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Furthermore, suppliers like Samsung Electronics and SK Hynix are trying to fulfill the memory chip orders placed earlier this year. For the camera lens, Huawei is procuring them from Largan Precision and Sunny Optical Technology. Even after the US chip ban coming into effect on September 15, Huawei could survive for a shorter period.

However, the company has to address the issues in order to survive in the long-term. As per a recent report, Qualcomm could get a license from the US government to supply its Snapdragon chipsets for Huawei. Without flagship chipsets from Qualcomm, Huawei can longer compete in the flagship smartphone segment.

The upcoming 5nm Kirin SoC could be the last chipset from Huawei

The upcoming 5nm HiSilicon Kirin SoC could also be the last high-end Kirin chip from Huawei. While Huawei designs its Kirin chips in-house, it uses the third-party foundries for producing them. TSMC has been the sole producer of high-end Kirin chips for a very long time.

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With no advanced foundries in China, the company has nowhere to look but end its production. Once the company runs out of current stock, it might suffer a 75 percent loss in smartphone shipments in 2021. The US equipment and technology in the semiconductor industry has been an integral part of the global supply chain.

Huawei will no longer have access to them without getting a special license from the US government. On the other hand, the Chinese government is also offering huge incentives to boost the domestic semiconductor industry. Huawei has already scheduled its IFA 2020 keynote for September 4, where it might unveil its new flagship Kirin chipset.