The growing pressure of the US-China trade war has greatly impacted Huawei’s mobile phone business, including sales of this year’s foldable mobile phones. To break through the US ban, which is increasing the constraints of both American and European manufacturers, Huawei is actively building its own mobile phone supply chain.
It has been reported that in addition to the China-based company, BYD, Huawei’s subsidiary, Huawei Machinery, will also undertake some of the production capacity of the Mate X and Mate 20X 5G models. Additionally, there are rumors that the company is aligning with Samsung, from mobile phone chip design to downstream mobile phone production, to create a complete mobile phone supply chain.
In addition to partnering with mobile phone OEMs, Huawei is also taking steps to work more closely with the Taiwanese semiconductor industry. For example, Siliconware Precision Industries’ (SPIL) new plant, which is located in Jinjiang, Fujian, will officially begin shipping Hauwei’s order in September. Additionally, Huawei has requested that IC testing company KYEC, Sigurd and Chunghwa Precision Test Tech. Co., Ltd. (CHPT) set up factories in mainland China.
This comes at a time when US companies are lobbying to ease the ban, as Huawei is a key customer for companies including Intel, Qualcomm, Broadcom, and Micron. In total, 33 of Huawei’s 92 suppliers are US companies. According to an article by Puja Tayal in the Market Realist, in 2018, Huawei spent $70 billion on components, ~$11 billion of which went to US companies. Broadcom claims that the ban will eliminate $900 million in revenue from Huawei, and will also impact other customer orders spending is reduced due to the trade wars.
While the components used in 5G products may pose a threat to national security, those used in mobile phones and data centers do not. As such, these companies are requesting those components be exempt from the ban.