Chinese tech companies’ stocks surge as Huawei’s smartphone launches; analysts say potential US curbs may backfire
Published: Sep 04, 2023 10:55 PM
Consumers line up outside a Huawei flagship store for Mate 60 pro series on September 3, 2023. Photo: Courtesy of Huawei

Consumers line up outside a Huawei flagship store for Mate 60 pro series on September 3, 2023. Photo: Courtesy of Huawei

Shares of Chinese chipmakers gained on Monday after domestic telecom giant Huawei unexpectedly unveiled its latest Mate60 Pro series last week. Experts said that potential US curbs targeting China's technology development will fail in the long term and may backfire. 

Multiple enterprises related to Huawei's supply chain gained sharply on Monday. For example, Dongguan Chitwing Technology Co rose by the 10 percent daily limit on four consecutive days. The company reportedly cooperates with Huawei in the precision machining sector. 

According to media outlet, citing sources from the supply chain, shipments of Mate60 Pro phones are raised to about 15 to 17 million, and Huawei will start in-store sales from September 10. 

Shares of Semiconductor Manufacturing International Co, China's largest contract chipmaker, extended their increase from last week, and surged by 6 percent as of the close on Monday, reaching 56.90 yuan ($7.83) per share. 

Chinese consumers were found lining up in large numbers to purchase Mate 60 Pro. A staff member at a Huawei store said that the waiting time for bookings will take one to two weeks, with customers restricted to buying one device each in addition to paying a 1,000-yuan deposit, the reported on Tuesday. 

A customer surname Yuan said that he is attracted by the chipset in the device. “I heard the performance of the chip is particularly good which can bring a smooth gaming experience on top of a good-looking design, so I am looking forward to using the phone, while supporting Huawei,” Yuan told the 

Huawei officially kicked off online sales for its latest flagship Mate 60 Pro on Sunday. The move triggered a buying spree, with long queues seen at Huawei stores across major Chinese cities on Sunday. Some came to experience the prototype.

Huawei CEO Ren Zhengfei said in a speech posted on the company's online community Xinsheng on Monday that Huawei is setting up a a reserve for top talent, including qualified talent from outside of the industry, in order to promote the company's research and development level.

Market observers said that the launch of the Mate 60 Pro highlighted a remarkable breakthrough in independent technological research and development despite US sanctions, but they also warned that the US might take further measures to curb China's technology development. 

US Commerce Secretary Gina Raimondo said on Sunday during a CNN show that the US will continue to sell semiconductors to China but not its most powerful ones "that China wants for its military."

The US will still stick to its usual strategic target to contain China's progress in research and manufacturing for high-end chips along with the nation's overall scientific development, Ma Jihua, a veteran industry analyst, told the Global Times on Monday.

Huawei unexpectedly announced preorders for the Mate60 smartphone series amid Raimondo's visit to China, and some speculated it's equipped with a domestically made 5G chip together with other vital electronic parts.

"If the Mate 60 series is equipped with a full package of 5G parts, it means the technology crackdown launched by the US has failed," said Ma.

Washington has restricted Huawei from buying advanced 5G chips and software from US companies since 2019, which dealt a heavy blow to its high-end smartphone businesses and left it only able to launch limited batches of 5G models using stockpiled chips.

He Weiwen, senior fellow of the Center for China and Globalization, told the Global Times on Monday that sanctions by the US may take effect in the short term but will definitely fail in the long term.

"It is estimated that US will turn to more sanctions after failing, but it is inevitable that China will overcome all the difficulties and prevail," He noted. 

China has been achieving breakthroughs and moving forward with its technological development under pressure, said Ma. For instance, Ma stressed that China now is able to complete the design and production of memory chips at levels reaching global giants like Samsung and SK Hynix.