Huawei will stop making its flagship Kirin chipsets next month as the impact of U.S. pressure on the Chinese tech giant grows, Richard Yu, CEO of Huawei's Consumer Business Unit, said in an event on Friday.

U.S. pressure on Huawei's suppliers has made it impossible for the company's HiSilicon chip division to keep making the chipsets, key components for mobile phone, Yu said.

With U.S.-China relations at their worst in decades, Washington is pressing governments around to world to squeeze Huawei out, arguing it would hand over data to the Chinese government for spying. Huawei denies it spies for China.

In May the U.S. Commerce Department issued orders that required suppliers of software and manufacturing equipment to refrain from doing business with Huawei without first obtaining a license.

"From September 15 onward, our flagship Kirin processors cannot be produced," said Yu. "Our AI-powered chips also cannot be processed. This is a huge loss for us."

Huawei's HiSilicon division relies on software from U.S. companies such as Cadence Design Systems Inc or Synopsys Inc to design its chips and it outsources the production to Taiwan Semiconductor Manufacturing Co (TSMC), which uses equipment from U.S. companies.

HiSilicon produces a wide range of chips including its line of Kirin processors, which power only Huawei smartphones and are the only Chinese processors that can rival those from Qualcomm in quality.

"Huawei began exploring the chip sector over 10 years ago, starting from hugely lagging behind, to slightly lagging behind, to catching up, and then to a leader," Yu said. "We invested massive resources for R&D, and went through a difficult process."

(Cover image via Reuters)