According to reliable sources, smartphones manufactured by China-based Huawei Technologies Co. Ltd. are expected to witness a price inflation as a result of sanctions imposed by the U.S. government, which has reduced the production of the company’s high-end Kirin chips.
Reportedly, the prices of Huawei’s smartphones have escalated by around 400 to 500 yuan on an average over the past month. Moreover, the Porsche design model of Mate 30, the company’s flagship smartphone, has witnessed a price increase from 10,000 yuan to 14,000 yuan (USD 2,067) since the month of January.
The enforcement of the sanctions comes along the heels of speculations pertaining to Huawei having close ties with the Chinese government and assisting them with intelligence gathering. However, the company has persistently denied being a risk to national security.
Chief executive of Huawei’s consumer business, Richard Yu mentioned in a statement that the company will no longer be able to produce Kirin chips after 15th of September. He added that this setback is a result of the U.S government’s decision to cut off vital technology supply to HiSilicon, a subsidiary of Huawei that relies on several U.S firms such as Synopsys Inc to design chipsets.
For those uninitiated, HiSilicon uses U.S.-based software such as Synopsys Inc. or Cadence Design Systems Inc. It also outsources its production to Taiwan Semiconductor Manufacturing Co. Ltd., which primarily uses America-made equipment.
Will Wong, an analyst at International Data Corporation (IDC), claimed that Huawei is likely to sustain their chip inventory until the middle of next year. He further mentioned that for the Kirin chips to last longer, the company must reduce their shipments.
Despite the major hindrance, the company is reportedly planning to launch its Harmony operating system on the smartphones from next year. This move comes in the light of the decision by the U.S. government to limit the Huawei’s access to Alphabet Inc.'s open source operating system Android.