Huawei running out of smartphone CPUs as US sanctions begin to bite

Chinese giant suggests current Kirin SoC could be last of its kind

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Huawei will halt production of its flagship Kirin chipsets later this year, due to US sanctions on Chinese companies.

Production of the Chinese firm’s Kirin and AI-powered chips, both of which are used to power its handsets, will be forced to stop on September 15 as a result of US sanctions on its suppliers, said Richard Yu, president of the company’s consumer unit, at an event on Friday.

“This is a very big loss for us,” Yu said. “Unfortunately, in the second round of US sanctions, our chip producers only accepted orders until May 15. Production will close on Sept. 15. This year may be the last generation of Huawei Kirin high-end chips.” And as the Kirin powers Huawei's Mate40 premium handset, it could make life hard for the Chinese manufacturer in that segment of the smartphone market.

Washington cut off Huawei’s access to US components and technology last year after warning that Chinese laws mean the mega-corp could be compelled to behave in ways detrimental to national security. Huawei and the Chinese state have denied the charges.

The Trump administration extended those restrictions in May, barring vendors worldwide from working for Huawei without a licence. The restrictions affected many of the firms that supply Huawei’s chip division, HiSilicon, including Cadence Design Systems or Synopsys.

Chip maker TSMC, which also uses American tech, reportedly halted orders from HiSilicon in May following the new rule.

Despite the bans, Huawei trumped Samsung to become the world's biggest smartphone seller after shipping more phones between April and June than any other supplier, according to analyst firm Canalys.

Huawei achieved that result thanks to Chinese consumers being more inclined to spend than folks elsewhere. Future quarters could be less fruitful as the combination of hardware shortages, plus difficult access to Android and associated apps, make Huawei handsets less attractive outside the Middle Kingdom.

A Huawei spokesperson with indirect knowledge of the situation said HiSilicon’s Kunpeng server chips, which are based on Arm’s architecture and used by Huawei in some products, will not be affected by the sanctions. However, Kunpeng is fabricated by TSMC, the same foundry that makes the Kirin series, so the server silicon is either manufactured using non-sanction-breaking equipment and software, Huawei has found some other loophole allowing continued supply, or it has made enough of the chips already to meet demand. Or something else. ®

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