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Huawei says it is running out of chips for its smartphones due to US sanctions

Huawei, the world’s largest smartphone vendor, says processor chips are running out due to US sanctions against the company, The Associated Press reported. And according to Richard Yu, CEO of Huawei’s consumer business, the Chinese phone maker will no longer be able to make Kirin chipsets itself from next month due to continued economic pressure from the US.

“Unfortunately, in the second round of US sanctions, our chip makers only accepted orders until May 15th. Production will close on September 15,” Yu said at a conference on August 7. “This year may be the latest generation of Huawei Kirin high-end chips.” Huawei’s upcoming Mate 40 phone, scheduled for release in September, could be the last phone to feature a Kirin chip.

The US has accused Huawei of building loopholes into its network infrastructure, ostensibly to support the Chinese government’s espionage efforts. Huawei has denied allegations of espionage by the Trump administration. But the Trump administration put Huawei and 114 of its subsidiaries on the entity list in May 2019, which meant that US companies could not sell technology to the company without the explicit approval of the US government.

It also meant that Google was not allowed to do business with Huawei, which prevented Huawei from obtaining an Android license and keeping Google apps from Huawei devices. The order used the International Emergency Economic Powers Act to justify the ban, stating that “openness must be offset by the need to protect our country from critical national security threats.”

Trump later extended the order until May 2021. Then, in May, the US Department of Commerce issued a modified export rule block shipments of semiconductors to Huawei to “strategically target Huawei’s acquisition of semiconductors that are the direct product of certain US software and technology.”

That rule prevented foreign semiconductor manufacturers using US software and technology in their operations from shipping their products to Huawei unless they first obtained a US license. Taiwan Semiconductor Manufacturing Co. (TSMC), the largest semiconductor maker in the world, has reportedly stopped orders for Huawei’s HiSilicon unit in May following the new US rule.

Despite the ban in the US, Huawei beat Samsung as the world’s largest smartphone seller earlier this year by shipping more phones than any other company between April and June, according to analyst firm Canalys.

The Wall Street Journal reported On Saturday, US chipmaker Qualcomm had asked the Trump administration to ease restrictions on component sales to Huawei and allow them to sell chips to Huawei for use in its 5G phones.