Huawei said to be frantically stockpiling phone parts before US ban

Huawei might be changing its story from defiance to one of defeat by this time next year if things don’t start looking up for it. Whereas last year it stood proud and proclaimed it could still conquer the smartphone market despite US export bans, it is now silently and chaotically trying to get supplies it needs before time runs out in mid-September. But even then, Huawei could see its smartphone empire burn by 2021 unless things take a turn for the better.

Huawei’s strong statements last year largely presumed it would still be able to get processors from its own HiSilicon subsidiary, not to mention other critical components needed to build phones. This year, however, the US Commerce Department issued a new rule that extended the export ban to anything and everything that makes use of US products and technologies, from the most complex processors to the smallest semiconductor.

Nikkei Asian Review reports that Huawei is now scrambling to get the supplies it needs before the ban takes effect fully on September 14. It has been calling suppliers in the middle of the night or holding video conferences extremely late just to ensure it is able to stockpile enough components for its next smartphones. Some suppliers have reportedly agreed to even ship half-finished or untested products to meet that deadline.

The report also indicates that Huawei might be able to have enough stocks to last it until the first quarter of 2021. After that, however, its shipments could plummet as much as 75% as it slows down its production to keep its stocks of components from running out quickly.

The company is now said to be running on a chaotic “survival mode”, never a good term for a once-proud giant that proclaimed it would soon be the world’s number one smartphone company. While it might still be able to ship 195 million phones this year, according to one analyst, that volume might be reduced to a measly 50 million next year if the situation doesn’t improve for it.

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