Huawei launches chip hunt as TSMC pulls plug

Huawei Technologies is said to be sourcing chips from around the world as its major supplier, Taiwan Semiconductor Manufacturing Co, will suspend the supply to Huawei after September 14 because of the US ban, Nikkei Asian Review reported.

The Chinese smartphone maker is stockpiling 5G mobile processors, Wifi, radio frequency and display driver chips and other components from key chip developers, including MediaTek, Realtek, Novatek, RichWave and others, sources said.

"It's not unusual for Huawei to call suppliers at 4am or have conference calls at midnight," a source familiar with the matter said. "Huawei is in a chaotic survival mode now."

Some chip suppliers have even agreed to ship half-finished products or wafers that have not been tested or assembled, the sources said.

Analysts said Huawei's handset shipments could fall by as much as 75 percent next year if the company runs out of chips.

Meanwhile, Huawei has announced that the company will be holding a press conference on September 3 but the company has not revealed what it plans to announce.

Along with the Huawei Mate40 series flagship smartphones, the company is also expected to unveil the latest Kirin 9000 flagship chipset.

Market watchers estimate the inventory of chips may be enough for usage until the beginning of next year.

The demand for 5G chips is not only tight for Huawei and also high for the world. Apple will also launch a new 5G phone this year, which will need those chips.

The revenue of global chip producers is expected to grow 14 percent in the third quarter, the latest research of TrendForce's Topology Research Institute shows.

TSMC is expected to top third-quarter revenue with US$11.35 billion (HK$88.53 billion). Its revenue will grow 21 percent year-on-year.

However, all phone equipment shares fell yesterday. AAC Technologies (2018) plunged 7.36 percent. Sunny Optical Technology (2382) was down 4.8 percent. Q Technology (1478) fell by 0.2 percent.