The bottom line is that the Chinese tech giant has sensed US sanctions. But the shortage of microchips is only a temporary obstacle, according to the group’s chairman.
Huawei Chairman Guo Ping told his employees that the company will return to the top in the smartphone battle. Pictured here during a conference in Portugal in 2019.
The biggest problem for us now is cell phones. We know you need microchips and advanced technology to make phones that are small in size and with low power consumption. Huawei can design this, but no one can help us with that, we’re stuck.
Huawei President Guo Ping said this at a meeting with his employees recently, according to a transcript from the meeting which among other things Reuters And CNBC opinion.
Guo is referring to US sanctions against China and Huawei, which President Donald Trump imposed last year.
You will take back the throne
In May 2019, the United States banned foreign companies using American technology from selling to the Chinese tech giant. The ban was justified by espionage charges against the company. After the so-called “temporary trade license”, the ban was reinstated in August last year.
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However, the chairman believes that the problem, that is, the lack of microchips, can be solved.
“Huawei will continue to be in the smartphone sector, and with the continuous progress in chip production, we will eventually reclaim the smartphone throne,” Guo said.
Revenue in Huawei’s consumer division fell 47 percent year-over-year in the first half, according to CNBC. Group-wide, revenue fell 29 percent, according to Reuters, the biggest drop ever.
Piece shortage
However, the lack of microchips can not only be attributed to US sanctions.
At the start of the Corona pandemic, demand for televisions, game consoles and electronic goods for the home office soared, and closed factories made it increasingly difficult to meet demand, the NTB wrote earlier in August.
When factories reopened, more and more microchips were ordered, which meant the backlog got bigger and bigger. In addition, production at several plants in Texas slowed as a result of a storm in February, while a plant in Japan burned in March.
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Global shortage of microchips is causing production problems
As automakers slowed production at the start of the pandemic, many microchip manufacturers chose to supply other industries. Now many car manufacturers, including Volkswagen and Volvo, are struggling to get enough microchips.
Although phone manufacturers have been relatively left out so far due to having so many microchips in stock, they are also beginning to notice a lack of offerings.
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