Benzinga | Aug 8, 2020 02:53PM EDT

Huawei Reportedly Set To Halt Manufacturing Of Kirin Chipsets

Huawei will stop making its Kirin Chipsets beginning next month, according to the Chinese financial magazine Caixin.

What Happened: Amid mounting pressure from the U.S. government, the suppliers of Huawei's HiSilicon Chip division have started to distance themselves from the company, the magazine said.

Huawei relies heavily on U.S. companies like Cadence Design Systems (NASDAQ:CDNS) and Synopsys Inc. (NASDAQ:SNPS) to design its flagship chips.

Under the current sanctions, they are unable to provide the required support to the company, and supplies will stop Sept. 15, Caixin reported. Huawei confirmed the news, the publication said in an update.

Why It's Important: The Kirin chipsets are used in Huawei's recent model Huawei Mate 40, which may now be the last models with the high-end processor chips.

"From Sept. 15 onward, our flagship Kirin processors cannot be produced," a Huawei exec said, according to Caixin.

Back in May, the U.S. Commerce Department prohibited U.S. companies from becoming involved with Huawei without obtaining a license. The U.S. government is also seeking extradition for Huawei's CFO Meng Wanzhou on charges of bank fraud.

What's Next: Due to the ongoing trade war with China, Washington is pressing governments around the world to squeeze Huawei out, according to Reuters, arguing it would hand over data to the Chinese government for spying. Huawei denies that it spies for China.