Huawei competitors have stepped up their purchases of IC parts to take over the market share relinquished by Huawei bectause of the US sanctions
Because Huawei is currently losing market share in the smartphone sector as a result of the massive impact of the U.S. embargo, various competitors are looking to profit. The major smartphone manufacturers are therefore now taking big risks and buying components on a large scale.
As the Taiwanese industry service DigiTimes reports, all of Huawei's really relevant competitors have recently begun to invest more heavily in the purchase of various components to build their devices. Because manufacturers want to take Huawei's market share on a large scale, they are apparently willing to take a risk when purchasing the parts.
Gambling with chip purchase
According to the report, Samsung, Xiaomi, Oppo and Vivo all saw a significant increase in orders placed with suppliers of certain components. Competitors are reported to have purchased significantly more driver chips for LCDs and even ordered more chips than were previously delivered to Huawei. As a result, manufacturers are building up large inventories without knowing whether they can actually build and sell corresponding quantities of finished smartphones.
The same is said to be true for other chips such as ambient light sensors. In some cases, however, manufacturers are also supposed to try to secure the availability of the chips they need because their suppliers have problems producing sufficient quantities due to the high demand.
The device manufacturers are therefore currently buying large quantities of chips at a stroke of luck, without being sure whether they can actually capture Huawei's share of the highly competitive market. The companies are thus risking building up considerable inventories without knowing whether they will ultimately be able to get rid of the planned quantities of finished devices. If they do not succeed, they will probably soon have to offer reduced prices in order to sell more finished smartphones and thus avoid impending losses.