Huawei has been pushing to get more of its supply chain into China as it faces a crackdown by the U.S., Nikkei Asian Review reported today, adding such a shift would help Huawei mitigate the impact of any further U.S. pressure on its suppliers.
In particular Huawei wanted its chip-related suppliers to carry out most chip packaging and testing -- the last step in making semiconductor components -- in China by the end of this year at the earliest, the report said citing sources familiar with the matter.
It has made a similar request concerning production of the print circuit boards on which chip components are mounted, the report said.
Huawei has also brought in more second-tier domestic suppliers since last year as part of its localization efforts, and is only ready to accept new suppliers if they have Chinese production capacity ready, sources said.
However Huawei's drive has hit challenges because of the economic uncertainties brought by Covid-19 as well as the latest round of Washington's clampdown.
Many suppliers want to "stay on the conservative side and avoid making bold movements" at a time when there is "low visibility over future demand," said a supply chain executive with direct knowledge of the issue.
"Some chip testing and packaging suppliers and print circuit board makers already helped Huawei expand some capacity in China over the past year... however, not all of them answered the call," said the executive.
"The global pandemic which already hit demand as well as the U.S. strong hostility against Huawei have weakened suppliers' incentive to swiftly address the Chinese company's push."
