Home ICT China’s Huawei blames global chip shortage on U.S. sanctions

China’s Huawei blames global chip shortage on U.S. sanctions

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The global chip shortage is a highly-complex and multifaceted issue, but Chinese tech company Huawei attempted to blame the U.S. for it on Monday.

Eric Xu, Huawei’s rotating chairman, said the sanctions imposed on the firm over the last two years are, “hurting the global semiconductor industry” because they have “disrupted the trusted relationship in the semiconductor industry.”

Demand for chips has soared during the coronavirus pandemic as people snapped up games consoles, laptops and TVs to help get through lockdowns. Insatiable demand for electronics isn’t the only reason why semiconductors are in short supply; shifting business models in the industry has also created a bottleneck at outsourced chip factories. The relatively small number of chip manufacturing plants and the lack of competition is another huge issue.

But despite all these factors, Huawei tried to lay the bulk of the blame on U.S. sanctions on Monday.

Speaking to analysts in Shenzhen at Huawei’s Analyst Summit, Xu said: “The U.S. sanctions is the main reason why we are seeing panic stockpiling of major companies around the world.”

He added: “Some of them never stockpiled anything, but because of the sanctions they are now having three months or six months of stockpiles.”

Huawei itself has built up a stockpile of chips to try to ensure its business — focused on telecoms equipment and consumer electronics — can continue as normal.

Some companies in other industries, such as the automotive sector, have been forced to temporarily shut down operations as a result of the chip shortage. U.S. auto executives and tech leaders were scheduled to meet remotely with President Joe Biden on Monday.

The U.S. imposed sanctions on Huawei after accusing it of building backdoors into its equipment that could be exploited by the Chinese Communist Party for espionage purposes.

cnbc.com

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