Huawei Cuts Orders to Key Suppliers After US Blacklisting: Nikkei

June 5, 2019 Updated: June 5, 2019

China’s Huawei Technologies has cut or canceled orders to major suppliers for components that go into its smartphones and telecom equipment following its U.S. blacklisting, the Nikkei reported on June 5, citing sources familiar with the matter.

Taiwan Semiconductor Manufacturing Co (TSMC) confirmed that orders from Huawei have declined after President Donald Trump imposed a ban on the Chinese firm on national security grounds, according to the report.

Huawei has also downgraded its forecast for total smartphone shipments in the second half of 2019 by “about 20 percent to 30 percent” from the previous estimate, the Nikkei reported.

Both, Huawei and TSMC did not immediately respond to a request for comment.

The Trump administration in May added Huawei to a trade blacklist. The move put Huawei and 68 affiliates in more than two dozen countries on the Commerce Department’s so-called Entity List, a move that bans the company from buying parts and components from American firms without U.S. government approval.

Ever since, global tech companies have been cutting ties with the Chinese telecom giant and complying with the U.S. ban.

Tech giants such as Alphabet Inc suspended the transfer of hardware, software and technical services to Huawei while Microsoft Corp said it had stopped accepting new orders from the company, according to a media report.

Optical components maker Lumentum Holdings Inc ceased all its shipments to Huawei, while U.S. chipmaker Qorvo Inc said it expects first-quarter revenue to take a $50 million hit due to a halt in shipments to the Chinese company.

Huawei is allowed to buy U.S. goods until Aug. 19 to maintain existing telecoms networks and provide software updates to its smartphones.

By Akanksha Rana

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