Huawei Phone Prices Rise in China on Fears of Chip Shortage 2c3y6p Technology News

Prices for new and used Huawei phones had risen steadily over the past month, by around CNY 400 to 500 on average. 4g3i12

By Reuters | Updated: 17 September 2020 16:22 IST

Huawei Phone Prices Rise in China on Fears of Chip Shortage

The US government last year moved to prevent most US companies from conducting business with Huawei t1y37

Highlights

Consumers are worried over the supply of components for newer handsets
Huawei will stop making its Kirin chips on September 15
HiSilicon relies on software from US firms to design its chips

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Chinese consumers are rushing to buy smartphones from Huawei featuring its high-end Kirin chips, fearing curbs on the firm's access to US technology will soon cut off production of its handsets.

Phone vendors in Huaqiangbei, the world's largest electronics market located in the southern city of Shenzhen, said prices for new and used Taobao.

Consumers are increasingly worried over the supply of components for newer handsets, said one vendor.

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"The Huawei phones are getting expensive but that's supply and demand," said the vendor, who gave her name as Xiao. "If people like the brand, they'll pay more, and who knows how good the chips they'll have in the future will be?"

The US government last year smartphones was ultimately answerable to the Chinese government. Huawei has repeatedly denied being a national security risk.

Last month, the United States further tightened restrictions to choke its access to commercially available TSMC) to stop shipping wafers to Huawei.

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HiSilicon from vital technology.

HiSilicon relies on software from US firms such as Synopsys to design its chips, and outsources production to TSMC, which uses US-made equipment.

Wholesale traders at the market said they had been busy for the last month meeting extra demand for online sales, with prices of higher-end phones rising every few hours. They were uncertain how much supply remained at distributors.

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Huawei does not disclose inventory information. A spokesman told Reuters the firm continues to operate according to demand.

It likely has chip inventory to last through the first half of next year, said analyst Will Wong at consultancy IDC.

"One option for them to have Kirin chips last longer is to ship less for the rest of the year," Wong said.

Last week, Huawei said it Android.

Yet analyst Mo Jia at Canalys said launching Harmony would only be a "symbolic innovation" if Huawei no longer had the chip supplies to make high-end phones.

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