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Huawei faces new challenges due to US sanctions

Chinese smartphone company Huawei recently snatched the title of world’s number one smartphone company from Samsung for the first time in the April-June 2020 quarter.

However, as a result of US sanctions, Huawei is now facing difficulties in making processor chips for its smartphones.

According to the report of the American news agency, this was stated by an official of the company and this indicates that the American pressure is affecting its business.

The United States last year blacklisted Huawei and made access to US parts and technology conditional on the issuance of a license.

Read More: Huawei revenue rises despite US sanctions

The sanctions were tightened in May this year, barring companies using US technology around the world from manufacturing parts for Huawei.

Richard Yu, head of Huawei’s mobile consumer unit, said engineers could be forced to halt production of the company’s processor chips Karen on September 15 because contractors needed US technology to make them. As a result, the company will not be able to manufacture its own chips.

“This will be a huge loss for us. Unfortunately, due to the second round of US sanctions, our chip producers will only be able to accept orders until May 15, and production will stop on September 15,” Huawei Karen said. It will be the last shipment of chips.

He said that Huawei smartphone production will have neither chips nor supply.

Read More:The UK is considering removing Huawei from its 5G networks

He said sales of the company’s phones would be lower this year than in 2019, when 240 million phones were sold, but did not elaborate.

Last month, the company released its January-June 2020 report, which showed revenue rose 13 percent to 454 billion yuan.

According to the report, the first quarter saw a negligible increase in revenue due to the US campaign against the company’s networking devices and the outbreak of the Corona virus, which affected the sales of smartphones.

“In the current context, open partnership and trust in global value chains are more important than ever. We promise to fulfill our obligations to consumers and suppliers, ensuring our survival,” Huawei said in a statement. We will continue to work for the global digital economy and technological development, no matter how many challenges the company faces in the future. ”

The company’s smart devices division was the highest earner, selling 256 billion yuan worth of products such as smartphones, tablets and others, while the carriers division accounted for 160 billion yuan and the rest of the revenue was part of the enterprise unit’s performance.

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