Wow! Huawei stopped production of flagship smartphones due to US sanctions

The sanctions that the US imposed on Huawei did not seem to have the impact on the company that the Americans hoped for. No, of course, the ban on the use of Google services hit sales, but the Chinese managed to offer users an alternative. As a result, the drop in demand was not so noticeable. Indeed, if you look at the Russian statistics, it becomes obvious that smartphones Huawei are still popular. But, as it turned out, the lack of Google services is not the worst thing.

Wow!  Huawei stopped production of flagship smartphones due to US sanctions

Huawei forced to stop production of flagship smartphones, albeit temporarily

Huawei was forced to freeze the production of flagship smartphones, analysts at Nikkei said. According to their sources, the Chinese company actually stopped the assembly lines, reduced most of the orders for components, and refused some altogether. The reason was the expansion of US sanctions, due to which TSMC, the main manufacturer of Kirin processors, terminated the contract with Huawei. Although TSMC is a Taiwanese company, the US threatened it with sanctions, and it was forced to end its cooperation with the Chinese.

Processors Huawei

Wow!  Huawei stopped production of flagship smartphones due to US sanctions

TSMC was influenced by the US and refused to cooperate with Huawei

The shutdown of production is a forced time-out that took Huawei to decide how to work further. Despite the fact that Kirin is a proprietary development of the Chinese company, it does not have its own production lines on which it could produce processors. Therefore, now Huawei is urgently looking for outputs to Qualcomm and MediaTek in order to renegotiate an agreement with them on the production of branded processors and the resumption of production of smartphones, which are now in limbo.

Nikkei does not specify the exact number of devices whose production Huawei was forced to freeze, specifying only that mainly flagship smartphones were affected, including the unreleased Huawei Mate 40. The upcoming novelty was supposed to be released in the second half of 2020 and become a competitor to the new iPhone. But due to the fact that Huawei has lost the opportunity to buy processors from TSMC, where the new generation was just being developed, it is obvious that Mate 40 will be released with a noticeable delay. According to preliminary estimates, this is at least 2-3 months.

It is interesting that the Chinese, in their usual manner, are silent about the real scale of the problem. In an interview with Nikkei, one of the top managers Huawei noted that the company expects to resume production of Kirin processors this month, but suppliers assure that this will not happen. Otherwise, Huawei would not refuse to supply components and cut them on such a large scale. This is readily believed, given that it is most likely impossible to reschedule production in just one month.

When Huawei Mate 40 comes out

Wow!  Huawei stopped production of flagship smartphones due to US sanctions

Huawei runs the risk of losing heavily in sales due to the ups and downs that have arisen

Well, and, of course, we should not forget that Qualcomm, which Huawei hopes to turn for help, is an American company, and they are known to be prohibited from doing business with the Chinese. Theoretically, Qualcomm could get permission to cooperate with Huawei from the US Department of Commerce, but given that the Americans have recently extended sanctions against the Chinese company, this can not be counted on either. This means that the only salvation Huawei can only be a factory MediaTek, which is Chinese to the core and is not influenced by the United States.

What will follow from this? Obviously, in the next couple of months Huawei, the production of flagship smartphones will not resume, and it will have to trade what it has. In addition, the delayed launch of the Mate 40 should become a big problem.This line has always been the most iconic for Huawei, because in it the company applied the most advanced developments, and the devices of the Mate lineup could really compete with iPhone. Therefore, the Chinese will be able to keep the flagship market only if Apple itself is forced to postpone the release iPhone 12. It turns out, Sun Tzu said correctly: your victory is in the hands of the enemy.

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