Chinese surveillance giant Hikvision stockpiles crucial parts to guard against potential US ban
- Hikvision reported a 90 per cent surge in stockpiles of components in the past six months
- Hikvision says it takes time to change suppliers and organise alternatives
Hikvision Digital Technology, China’s top surveillance camera provider, has sharply increased its stockpile of components and finished products amid concerns that the US may bar it from doing business with American suppliers like it did with Chinese telecommunications giant Huawei Technologies.
The Hangzhou-based company reported an over 90 per cent surge in holdings of components and 30 per cent in finished goods over the past six months, saying that such a move was meant to ensure “sustained and stable” production.
The Trump administration was reportedly deliberating whether to add Hikvision to a blacklist that would bar it from US components or software, which would have widened a dragnet beyond Huawei Technologies. Federal agencies were barred from buying from Hikvision after the company was named in the US 2019 National Defence Authorisation Act on concerns that they pose a risk to national security.
“The [increased] inventory is a safe approach, as there’s no sanction today but it may drop in all of sudden tomorrow,” Huang Fanghong, Hikvision board secretary, said at an investor briefing on Saturday, according to a transcript posted along with its earnings report.
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“Although there are suppliers that can step in, it takes time to switch from one to another, and also for new suppliers to organise production.”