Huawei's Chip Reserves Much Smaller Than First Suspected

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Huawei's chip reserves are even smaller than originally suspected as TSMC left it in a pretty rough spot in mid-September. Insiders previously revealed Huawei received barely over half of its final chip order placed with the Taiwanese manufacturer. More specifically, TSMC ostensibly delivered roughly 8.8 million chips out of a 15-million order, as Chinese media widely reported in recent weeks.

There's been no shortage of speculation on how long could Huawei maintain something resembling a release schedule with that stockpile. Now, however, it would appear its life expectancy is shorter than originally anticipated. As far as actually competitive silicon goes, it almost certainly won't have components for anything beyond the Mate 40 series. In fact, it's dubious whether the said 8.8-million stockpile even consists of solely Kirin 9000 chips.

That's assuming it's just sitting on next-generation chipset designs, mind you. Which isn't outside of the realm of possibility, to be fair. Yet without constant prototype production, the Kirin design team's work can hardly proceed as usual.

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Chip stockpile or not, is this the end of the road for Huawei?

As a reminder, TSMC is unable to do any kind of semiconductor business with Huawei as of September 15th. And while a lot of damage has already been done to tis near-term ambitions, the company itself won't be going anywhere. If anything, Huawei's using this turn of events as a lesson in sustainability. But coming up with competitive SoC designs is easier said than done. Well, at least if you can't use American IP and are forced to start from scratch.

This newest report out of the Far East hence adds some context to Huawei's predicament. With that said, the gravity of the situation was pretty well-established even beforehand. As while the lack of cutting-edge chips is crippling to its smartphone ambitions, it's not like other key components are freely available. For example, Sony's leading camera sensors are currently just as unreachable as TSMC's foundry business.

And unless the U.S. ban magically disappears in the following weeks, missing out on one smartphone generation will be the least of Huawei's worries. Of course, that isn't to say the company return to its explosive growth trajectory. But with active opposition from Washington, it's going to be years until its standalone semiconductor designs stand a chance of being competitive.

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In fact, there's arguably no such thing as a "standalone" architecture in today's day and age. And with Huawei's stockpiling plan falling flat, it's apparently only a matter of time before what remains of its mobile unit follows suit.