The Wall Street Journal reports Huawei Manages to Make Smartphones Without American Chips.

American tech companies are getting the go-ahead to resume business with Chinese smartphone giant Huawei Technologies Co., but it may be too late: It is now building smartphones without U.S. chips.

Huawei’s latest phone, which it unveiled in September—the Mate 30 with a curved display and wide-angle cameras that competes with Apple Inc.’s iPhone 11—contained no U.S. parts, according to an analysis by UBS and Fomalhaut Techno Solutions, a Japanese technology lab that took the device apart to inspect its insides.

In May, the Trump administration banned U.S. shipments to Huawei as trade tensions with Beijing escalated. That move stopped companies like Qualcomm Inc. and Intel Corp. from exporting chips to the company, though some shipments of parts resumed over the summer after companies determined they weren’t affected by the ban.

Meanwhile, Huawei has made significant strides in shedding its dependence on parts from U.S. companies. (At issue are chips from U.S.-based companies, not those necessarily made in America; many U.S. chip companies make their semiconductors abroad.)

Huawei long relied on suppliers like Qorvo Inc., the North Carolina maker of chips that are used to connect smartphones with cell towers, and Skyworks Solutions Inc., a Woburn, Mass.-based company that makes similar chips. It also used parts from Broadcom Inc., the San Jose-based maker of Bluetooth and Wi-Fi chips, and Cirrus Logic Inc., an Austin, Texas-based company that makes chips for producing sound.

Yet Another Trump Trade Win

  • Trump cut off supplies so China looked elsewhere.
  • Trump changed his mind.
  • This is what constitutes a win.

When Huawei came out with this high-end phone—and this is its flagship—with no U.S. content, that made a pretty big statement,” said Christopher Rolland, a semiconductor analyst at Susquehanna International Group.

Huawei executives told Rolland that the company was moving away from American parts, but it was still surprising how quickly it happened.

This was likely going to happen anyway, but Trump escalated the speed at which it happened.


Trade Deal?

Standard Assumption for 17 Months

Assuming there is a deal, the standard assumption for 17 months, Trump will announce two key elements.

Greatest Deal in History

  1. China will resume buying the same amount of soybeans as before.
  2. China will resume buying the same amount of chips as before.

​The longer this takes the more wins there will be.

With that in mind, please recall Another Trump Tariff Success Story: Vietnam.

And despite the fact that Trump's China Tariffs Made Matters Made the Global Manufacturing Recession Worse and has killed US farmers, It's important to remember, Trump is collecting "huge tariffs".

So please brush aside this recession warning: Freight Volumes Negative YoY for 11th Straight Month.

Mike "Mish" Shedlock

Tracking the Trade War: US Car Sales to China Down, Parts From China Up

A pair of charts by Brad Setser highlight's Trump's difficulty in winning the trade war with China.

Xi Addresses China (and Trump): "No One Can Dictate to China"

Chinese President Xi Jinping addressed China today in a defiant tone that appears aimed as much at the US as China.

China Posts Largest-Ever Annual Trade Surplus with US: What's it Mean?

China posted a $275.8 billion trade surplus with the US in 2017, even though its overall surplus shrank. What's next?

US Trade Talks With China Collapse: No Further Talks Scheduled

Either Trump backs down from repeated threats or more tariffs are coming as talks with China collapse.

China's Global Trade Surplus Expected to Go Negative, US Not the Beneficiary

China's trade surplus with the rest of the world is shrinking at a fast pace, just not with the US.

Spotlight Soybeans: Bunge CEO "China Deliberately Not Buying US Products"

In its trade dispute with the US, started by Trump, China is deliberately not buying US products.

China Halts All US Ag Imports, Trump Accuses China of Currency Manipulation

It didn't take long for China to retaliate against Trump's trade war escalation. It did so by halting all US ag imports.

Recycling Movement Fails: China Doesn't Want US Garbage, Not Profitable Here

US Cities are abandoning recycling efforts because it's too costly. And China no longer accepts even our sorted garbage.

US Treasury Declares China a Currency Manipulator Under Orders From Trump

It's now official. The US Treasury says China is a currency manipulator. What's next?