New U.S. sanctions have cut off Huawei Technologies from manufacturing its own processors, but that doesn't stop it from using the time left until September to stock up on needed components. Sources say that for some positions these stocks already reach the two-year requirement.
As the , Huawei Technologies began stocking up on American components at the end of 2018, immediately after the arrest of its founder's CFO and daughter in the US. Last year, Huawei spent $23,45 billion on the purchase of materials and components, which is 73% more than the core expenses of the previous reporting period. Production volumes did not increase proportionally, which means that strategic stocks of components were being formed.
According to people familiar with the matter, Huawei's current inventory of Intel CPUs and Xilinx programmable matrices will last one and a half to two years of normal activity. Huawei will not be able to effectively replace these key components for the development of cloud infrastructure and the production of base stations with anything else, especially after the ban on the manufacture of its own HiSilicon processors by third-party contractors.
Interestingly, after getting acquainted with the new US export control rules, AMD announced that there were no visible obstacles to the supply of its processors to Huawei. The latter, even under the conditions of sanctions, found opportunities for the formation of increased stocks of American processors. Purchases were carried out through large distributors in retail chains, if necessary, the transaction was carried out through third companies. Huawei was ready to overpay for processors, it is possible that such actions partly provoked a shortage of Intel products last year.
Industry experts believe that Huawei's stock of CPUs will solve the problem of uninterrupted supply for some time, but it will still put the company's competitiveness at risk. The server and telecom solutions segment is evolving very fast these days, the product range needs to be constantly changed and improved, and the huge inventory of not the freshest components will eventually begin to reduce the flexibility of Huawei's business in the competition.
Source: 3dnews.ru