Huawei’s Doomsday Plan Made Us Think Chips Were Selling like Hotcakes

Huawei’s efforts to prepare for a possible ban in the United States included stockpiling a large amount of hardware components that would have allowed the company to continue its normal operations even without support from American companies.

And as it turned out, all this inventory buildup that Huawei has been making in anticipation of more US restrictions generated what an analyst from CLSA calls “fake demand,” which could now lead to a drop of the semiconductor sector in the second quarter of 2019.

In other words, Huawei purchased so many components that it created the false impression of a massive growth in the chip market, with analyst Sebastian Hou explaining that the increase reached 8 percent.

“Huawei’s inventory pre-build has helped related tech/semi suppliers to report better-than-expected or less-than-feared numbers in 1H19,” he is quoted as saying by <a href="… (read more)

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