The market is living with a chip shortage and its seems that this period will last until early next year. The lack of components forced to reduce production plans and sent prices upward. Naturally, analysts blame the coronavirus pandemic for everything, which disrupted the smooth operation of the supply chain. They also blame Huawei, which last year frantically tried to buy up everything it could reach.
For its part, the Chinese company blames the White House administration. According to Huawei, it was the American sanctions that provoked the panic buying of components and chips in particular; which ultimately became the reason for the shortage.
Huawei blames the US for chip shortage problems
Gizchina News of the week
Huawei CEO Eric Xu said in a speech at the analyst summit that the companies had not previously sought to stockpile chips. This was simply not necessary. Now, many manufacturers prefer to stock up for good, creating a stock for 3-6 months in advance. All this ultimately disrupted the well-coordinated work of the supply chain; component manufacturers simply cannot keep up with demand.
According to the top manager of Huawei, it is the United States that may be to blame for the onset of the global economic crisis. With its sanctions, America destroyed the partnerships and trust that existed in the chip supply chain. Now a number of countries are striving to establish their own production of semiconductor products and do not spare huge funds for this, and this, in turn, will lead to an increase in prices for chips and, as a result, price tags for electronics will rush up.
Eric Xu said that Huawei is looking for a way out of this situation when it is simply deprived of the opportunity to buy chips. Now the company still has a certain stock of components, but this will not last long. Therefore, it actively invests in research and development in order to start producing processors on its own in the future. The negative experience with Huawei forces other Chinese companies to act with caution and seriously think about the future. There is a possibility that other Chinese companies will also start producing chips. As a reminder, predictions are floating around the net that Xiaomi and Oppo may release their own chips for 5G smartphones this year or early next year.
What Huawei said is absolutely correct because if the US had not put sanctions on Huawei they would not have to get as much stock as they did it also probably made other firms to stock up incase of a shortage like what is happening now in the end its going to be the public that are going to end up paying for it