The Effect Of US Sanctions-It Is Rumored That Huawei Reduce Orders Of Supply Chain
The Nikkei News quoted a source in the conversation and reported that in response to the technology war launched by the United States, Huawei and ZTE, the two major telecommunications equipment vendors in mainland China, are accelerating "de-beautification" and are beginning to change product designs to reduce dependence on the United States. The relevant changes take time. As a result of the rectification, Huawei and ZTE slowed down the installation of fifth-generation mobile communication (5G) base stations in the mainland.
Huawei and ZTE are the most critical players in the construction of 5G base stations in mainland China, and rely heavily on the supply of PCB factories from Taiwan such as Wenmao (3105), Taishuo, Lianya, Shengdak, and Huatong. Once Huawei and ZTE slow down the deployment of 5G base stations in mainland China, the market is worried about simultaneously reducing orders for Taiwan's supply chain and disrupting the pace of subsequent production.
In particular, Wenmao is a supplier of power amplifiers (PA) for Huawei's base station, and its revenue from Huawei accounts for as high as 15% to 20%. The market worry is the most affected. In this regard, Chen Jincai, the chairman of Wenmao, pointed out yesterday (19) that 5G is already a trend. At most, the construction will be delayed and construction will continue. Do not need to worry too much.
Chen Jincai said that the US-China trade war will not stop in a short period of time, and the supply chain will pay attention to market changes. At present, he will not be overly worried about business opportunities in the 5G market, and will still expand production capacity according to the established plan to fully meet customer needs.
PCB industry also mentioned that Huawei and ZTE still attach great importance to infrastructure requirements. Various new designs have been finalized two months ago, and relevant suppliers have already cooperated to complete verification designs. Since May this year, Huawei and ZTE have accelerated their de-beautification operations. Huawei has also "goed to HiSilicon" and "goed to American technology." In June and July of this year, relevant PCB and CCL manufacturers have completed new designs. The traditional peak season demand has not change.
However, a ZTE parts supplier revealed that "customers have told us to slow down shipments in June and almost completely stopped shipments in July."
The Nikkei report also pointed out that Huawei's parts suppliers revealed that Huawei has changed some designs and replaced the equipment used in the manufacturing process, thus slowing down the installation speed of 5G base stations. The supplier’s supervisor said: “In addition, this customer may cut orders by the end of this year.”
The US government's decision on the 17th to expand sanctions and try to squeeze Huawei out of the US technology supply chain may further slow down the construction of 5G infrastructure.