diff --git a/ports/esp32/mpconfigport.h b/ports/esp32/mpconfigport.h
index fd810e07b8..1877a01437 100644
--- a/ports/esp32/mpconfigport.h
+++ b/ports/esp32/mpconfigport.h
@@ -30,6 +30,13 @@
 #define MICROPY_EMIT_XTENSAWIN              (1)
 #endif
 
+// workaround for xtensa-esp32-elf-gcc esp-2020r3, which can generate wrong code for loops
+// see https://github.com/espressif/esp-idf/issues/9130
+// this was fixed in newer versions of the compiler by:
+//   "gas: use literals/const16 for xtensa loop relaxation"
+//   https://github.com/jcmvbkbc/binutils-gdb-xtensa/commit/403b0b61f6d4358aee8493cb1d11814e368942c9
+#define MICROPY_COMP_CONST_FOLDING_COMPILER_WORKAROUND (1)
+
 // optimisations
 #define MICROPY_OPT_COMPUTED_GOTO           (1)
 
diff --git a/py/parse.c b/py/parse.c
index 3972893cbb..14f5f6c105 100644
--- a/py/parse.c
+++ b/py/parse.c
@@ -639,6 +639,11 @@ STATIC MP_DEFINE_CONST_MAP(mp_constants_map, mp_constants_table);
 STATIC void push_result_rule(parser_t *parser, size_t src_line, uint8_t rule_id, size_t num_args);
 
 #if MICROPY_COMP_CONST_FOLDING
+#if MICROPY_COMP_CONST_FOLDING_COMPILER_WORKAROUND
+// Some versions of the xtensa-esp32-elf-gcc compiler generate wrong code if this
+// function is static, so provide a hook for them to work around this problem.
+MP_NOINLINE
+#endif
 STATIC bool fold_logical_constants(parser_t *parser, uint8_t rule_id, size_t *num_args) {
     if (rule_id == RULE_or_test
         || rule_id == RULE_and_test) {