SHANGHAI/SHENZHEN, China (Reuters) – Huawei Technologies Co [HWT.UL] will stop making its flagship Kirin chipsets next month, financial magazine Caixin said on Saturday, as the impact of U.S. pressure on the Chinese tech giant grows.

U.S. pressure on Huawei’s suppliers has made it impossible for the company’s HiSilicon chip division to keep making the chipsets, key components for mobile phone, Richard Yu, CEO of Huawei’s Consumer Business Unit was quoted as saying at the launch of the company’s new Mate 40 handset.

With U.S.-China relations at their worst in decades, Washington is pressing governments around to world to squeeze Huawei out, arguing it would hand over data to the Chinese government for spying. Huawei denies it spies for China.

The United States is also seeking the extradition from Canada of Huawei’s chief financial officer, Meng Wanzhou, on charges of bank fraud.

In May the U.S. Commerce Department issued orders that required suppliers of software and manufacturing equipment to refrain from doing business with Huawei without first obtaining a license.

“From Sept. 15 onward, our flagship Kirin processors cannot be produced,” Yu said, according to Caixin. “Our AI-powered chips also cannot be processed. This is a huge loss for us.”

Huawei’s HiSilicon division relies on software from U.S. companies such as Cadence Design Systems Inc or Synopsys Inc to design its chips and it outsources the production to Taiwan Semiconductor Manufacturing Co (TSMC), which uses equipment from U.S. companies.

Huawei declined comment on the Caixin report. TSMC, Cadence and Synopsys did not immediately respond to email requests for comment.

HiSilicon produces a wide range of chips including its line of Kirin processors, which power only Huawei smartphones and are the only Chinese processors that can rival those from Qualcomm in quality.

“Huawei began exploring the chip sector over 10 years ago, starting from hugely lagging behind, to slightly lagging behind, to catching up, and then to a leader,” Yu was quoted as saying. “We invested massive resources for R&D, and went through a difficult process.”

Reporting by Josh Horwitz in Shanghai and David Kirton in Shenzhen; Editing by William Mallard

Leave a Reply

Your email address will not be published. Required fields are marked *

You May Also Like

S&P 500 tops 3,000 pts on hopes of economic recovery, COVID-19 vaccine

(Reuters) – U.S. stocks jumped and the S&P 500 breached 3,000 points on Tuesday as optimism about a potential coronavirus vaccine and a revival in business activity helped investors overlook simmering Sino-U.S. tensions. The benchmark index traded above the key…

COVID-19-hit Iran asks IMF for aid

Iranian officials confirmed they had asked the International Monetary Fund for a $5 billion (€4.5 billion) emergency loan. It was the first time in six decades for the country to do so. The escalating coronavirus spread has claimed over 400…

Uber, hungry for a deal, now reportedly in talks to acquire Postmates

(CNN Business)Just a few weeks after it lost out on a high-profile deal to acquire food delivery company Grubhub, Uber hasn’t given up on bolstering its own meal delivery service with an acquisition. Uber (UBER) is now reportedly in talks…

Boeing wins first order this year for 737 Max planes

London (CNN Business)Boeing has secured its first order for the troubled 737 Max in nine months. The planemaker said in a statement on Wednesday that Enter Air, Poland’s biggest charter carrier, has ordered two of the Max airplanes, the 737-8,…