2024-02-05 10:11:08 ET
A shortage of %ArtificialIntelligence (A.I.) microchips has forced Chinese technology giant %Huawei to slowdown production for its premium Mate 60 smartphone.
Huawei uses one facility in China to produce the microchips that power its rival to the %Apple (NASDAQ: AAPL) iPhone, and that manufacturing plant is having difficulty sourcing the needed chips.
The slowdown in production of the Mate 60 comes as Huawei tops domestic Chinese smartphone sales for the first time in more than three years, knocking Apple off the top spot.
The slowdown also comes as Huawei works to rebuild after U.S. sanctions cutoff its access to advanced microchips from suppliers such as %Nvidia (NASDAQ: NVDA) and related chipmaking tools.
Huawei has been developing its own microchips, called the “Ascend” series, that is widely viewed as the most competitive A.I. chip available from a domestic source in China.
Huawei said that it is now prioritizing production of its Ascend microchips and has slowed manufacturing of the Mate 60 smartphone for the time being, said the company.
The Mate 60 has become extremely popular in China. Even before the current manufacturing slowdown, the handsets had been out of stock, with consumers complaining online about month-long waiting times to get one.
Huawei is privately held, though there are rumours that it may hold its long-awaited initial public offering (IPO) later in 2024.