Experts are skeptical about Huawei's claim it can ensure a steady components supply without the US, say it would struggle to replace chips, lasers, other parts
SAN FRANCISCO/HONG KONG (Reuters) - Chip experts are calling out Huawei for its claims that it could ensure … Tweets: @benktallmadge and @stephennellis Tweets: BenTallmadge / @benktallmadge : Tall Chip Tale? Huawei's Backup Plans Leave Experts Unconvinced A Chinese-based source at a US tech company told Reuters that non of Huawei's US suppliers “can be replaced by Chinese ones”, not within a few years, at least. @TheLastRefuge2 @Avery1776 https://www.reuters.com/... Stephen Nellis / @stephennellis : Chip design software and specialized lasers are just a few of the things Huawei will have trouble finding non-US substitutes for. @SijiaJ and I explain: Tall chip tale? Huawei's backup plans leave experts unconvinced https://www.reuters.com/...
Context & Ripple Effects
In May 2019, with Washington newly cutting Huawei off from advanced US chips, the company claimed it could guarantee a steady component supply without American vendors. Reuters' reporting found little expert support for that claim: a source at a US tech firm said none of Huawei's US suppliers could be replaced by Chinese ones within years, and Stephen Nellis flagged chip design software and specialized lasers as particular gaps.
The subsequent record is a split verdict. Huawei did respond with a massive, partly covert localization push — a [[a:985335|stealthy domestic chip supply chain built with partners in Beijing, Wuhan, Qingdao and Shenzhen]] and support for the Shenzhen startup PXW to procure chipmaking equipment — yet state-funded chipmakers like HSMC and QXIC failed without producing chips, and by 2025 CEO Ren Zhengfei himself conceded Huawei's chips lag one generation behind US peers.
First-order effects
- Huawei's US suppliers immediately face losing one of their largest customers, while Huawei must source chips, lasers, and electronic design software elsewhere or redesign products around them.
Second-order effects
- The cutoff pushes Huawei into an expensive substitution program — later reported at over $55.8 billion across multiple cities — and forces Beijing to bankroll domestic alternatives, several of which (HSMC, QXIC) burned hundreds of millions of dollars without shipping a chip.
Third-order effects
- If the pattern holds, the industry splits into partially parallel supply chains: Huawei survives and even grows profit on Beijing support, but remains a generation behind at the leading edge — partial decoupling rather than full self-sufficiency.
The trend: US export controls are forcing Chinese tech firms toward costly, state-funded supply-chain localization that narrows dependence on US parts without closing the leading-edge gap.