Huawei is stocking on many parts for protection against the US. With over US$30 billion in cash, it can afford to carry a reserve inventory. When I look at the primary suppliers, it’s not clear Huawei is buying all parts. The most advanced chips come from TSMC. Sales are up, but not drastically.
Huawei since the beginning of the year has bought RF front end modules from top US suppliers in large volume. I could see that from the financials of Skyworks and Qorvo. I’d guess it is also gobbling FPGA’s the other major component where the US is dominant.
Digitimes, a generally reliable source, worries
Chinese smartphone vendors, particularly Huawei, scrambled to stock up components in the second-quarter of 2019 amid escalating US-China trade tensions. Such precautionary orders sharply boosted second-quarter smartphone AP shipments, but are set to undermine shipments in the third quarter, according to Digitimes Research’s latest China Smartphone AP quarterly report.
It predicts that the sales of application processors, the main chip in most phones, will fall 8% from last year’s third quarter.
I try to be very careful with stories of possible supply problems. Any time there’s a shortage in sight, even a Trumpian one, sensible companies build a reserve stock. Many double order parts. In many cases, the extra orders create a shortage where there was none before.
When problems unravel, results can be extreme.