Huawei has been piling up inventory since around the end of 2018, according to industry sources in Taiwan. Inventory levels at the China-based vendor should be able to sustain its shipments until the end of 2019, the sources continued.
Huawei has been blacklisted by the US government, but the company seems to have well prepared for the ban. It has been stockpiling inventory since late 2018, the sources continued. Huawei's Taiwan-based chip components and equipment suppliers, for example, were already demanded to kick off their shipments in the first quarter of 2019 to fulfill the orders placed in advance, the sources said.
Huawei has managed to raise its inventory levesl that will help it mitigate the impact of the US ban on the China-based telecom giant's operations until at least the end of 2019, the sources noted.
Huawei has in recent years become a major client of many Taiwan-based chipmakers, including Foxconn and TSMC. The US ban on Huawei will affect negatively these suppliers' performance this year, according to market observers.
TSMC, which fabricates nearly all mobile SoCs for Huawei's HiSiicon, will likely see orders for Huawei phones and other devices turn weak following the US trade restrictions on Huawei, the observers indicated. Meanwhile, sales of Apple's next-generation iPhones in China are also expected to be less optimistic, casting a further shadow on the pure-play foundry's performance in the second half of 2019.
TSMC may suffer a larger-than-expected revenue decline in 2019, if its deliveries to Huawei and HiSilicon are forced to halt at some point, the observers said.
Article translated by Jessie Shen
