Losses are accumulating after Washington banned Huawei from using components and tech made in the US. According to a recent statement by the company, Huawei is starting to run out of processor chips to make smartphones and production of in-house Kirin chips will stop on September 15. Richard Yu, president of Huawei’s consumer unit, said that, in order to build the Kirin chips, the company relies on contractors who use US-made components. With the ban in place, the company can no longer get these components, so they have no chips and no supply.
As a result, Huawei officially confirmed at the 2020 Summit of the China Information Technology Association that the Mate 40 is the last generation of flagships to feature the high-end Kirin processor. It’s a huge loss for the company, and many are already wondering if Huawei will be able to survive without its custom Kirin chips and high-tension US-China relations.
This lack of Huawei processor chips supply is bound to leave a dent in the sales department. Richard Yu didn’t say precisely by how much, but he did mention that he expected Huawei sales to be much lower than the 240 million smartphones sold last year. Besides, it’s not just smartphones that will be affected. Huawei used the Kirin chips for routers, switches, and other hardware, so it will be interesting to see how the company addresses manufacturing challenges. China’s Semiconductor Manufacturing International Corporation (SMIC) might seem like the first reasonable solution, but they’re behind on cutting-edge technology, and besides, they use equipment made in the US. Competitors Qualcomm and Samsung are clearly not an option, so MediaTek seems to be the only viable solution so far.
Huawei has worked with MediaTek before on the production of its affordable range of smartphones and, according to industry experts, Huawei purchases from MediaTek will increase by 300% in 2020. Some reports even say that Huawei has already ordered hundreds of millions of chips from MediaTek as a backup for Kirin shortages. However, even with the MediaTek Dimensity 100 as a premium Kirin replacement, it will be hard for Huawei to keep up with the competition. Plus, it was the Kirin chips that made Huawei phones stand out, and, without them, Huawei will need to think of other ways to innovate.
Earlier this year, Huawei was banned from using Google Play Store on their phones, and their alternative, App Gallery, while heavily advertised and much improved in the past months, is far from being complete. Right now, the only edge Huawei has over its competitors is the professional camera quality, but without the Kirin processors, they could lose even that. Huawei can always move its software to another chip. Still, some of the best things about their phones were made possible thanks to the hardware, so it’s difficult to estimate how well those features will translate on another processor. Superzoom, low-power voice recognition, noise reduction, facial recognition, these could all lose part of the performance that made them so special.