Huawei phone

Huawei phone prices rise in China over fears of chip shortage

SHENZHEN (Reuters) – Chinese consumers are rushing to buy smartphones from Huawei Technologies Co Ltd with its high-end Kirin chips, fearing that restrictions on the company’s access to U.S. technology will soon halt production of its high-end handsets.

Phone sellers in Huaqiangbei, the world’s largest electronics market in the southern city of Shenzhen, said prices for new and used Huawei phones have risen steadily over the past month, by around 400. at 500 yuan on average.

The Porsche-designed model of Huawei’s flagship Mate 30 was selling for 14,000 yuan (1,599.97 pounds), up from 10,000 yuan in January, a supplier said. The phone was available at a similar price in the Taobao online marketplace.

Consumers are increasingly concerned about the supply of components for new handsets, a supplier said.

“Huawei phones are getting expensive, but it’s supply and demand,” said the seller, who was called Xiao. “If people like the brand, they will pay more – and who knows how good the chips they will have in the future will be? “

Last year, the U.S. government decided to block most U.S. companies from doing business with Huawei, claiming the world’s largest maker of mobile telecommunications equipment and smartphones was ultimately accountable to the government. Chinese. Huawei has repeatedly denied being a national security risk.

Last month, the United States further tightened restrictions to stifle its access to commercially available chips, prompting Taiwan Semiconductor Manufacturing Co Ltd (TSMC) 2330.TW to stop shipping wafers to Huawei.

Richard Yu, general manager of Huawei’s consumer business, later said the company would stop manufacturing its Kirin chips on September 15 due to U.S. measures to cut its HiSilicon chip manufacturing unit from vital technology.

HiSilicon relies on software from American companies such as Cadence Design Systems Inc. CDNS.O or Synopsys Inc SNPS.O to design its chips and outsource production to TSMC, which uses equipment made in the United States.

Wholesalers in the market said they had been busy meeting additional demand for online sales over the past month, with high-end phone prices rising every few hours. They did not know how much supply was left at the distributors.

Huawei does not disclose inventory information. A spokesperson told Reuters the company continues to operate on demand.

It likely has a stock of chips that will last until the first half of next year, said analyst Will Wong of consulting firm IDC.

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

Last week, Huawei announced plans to introduce its Harmony operating system to smartphones next year, in part to overcome US limits on its access to Alphabet Inc. GOOGL.O Android.

Still, Canalys analyst Mo Jia said the launch of Harmony would only be a “token innovation” if Huawei no longer had the chip supplies to make high-end phones.

Reporting by David Kirton; Editing by Christopher Cushing

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