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Huawei stockpiles telecoms components

Friday, January 24, 2020

Huawei is building a year’s supply of components required for its telecoms infrastructure business, reports the Nikkei.

Despite the recent US-China trade deal, Huawei expects a tightening of the US restrictions on supplies of components and maybe an outright ban.

Currently companies need to get an export licence if their products have 25% or more US content.

It is reported that this rule could be tightened to 10% or 0%.

Also the types of products covered by the restrictions could be widened.

In the meantime, Huawei’s suppliers are caught in the dilemma of meeting as much of Huawei’s sharply increased purchase orders as they can – knowing that these may suddenly fall off a cliff – or restricting their sales to Huawei so they don’t become too reliant on a single customer.

By: DocMemory
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