Source: Content compiled from "androidcentral" by Semiconductor Industry Observation (ICBank), thank you.
You may have a phone with a built-in Qualcomm chip, and if it is a high-end model, you may be happy with its performance. This is because Qualcomm has made a very good mobile chipset, and Snapdragon integrates the CPU, GPU and wireless communication devices perfectly.
Qualcomm knows there are two other companies that are desperate to reach the level they are now—or at least it was like that before. Samsung has decided to stop developing custom Exynos CPU cores and intends to try something different for the foreseeable future. In this way, only Huawei is left on the field to compete with Qualcomm, while the US government wants to prevent Huawei from developing in this field through sanctions, which may force Huawei to stop the production of HiSilicon kirin chipsets.
If it is in a lack of competition, Qualcomm chips may make people feel lacking, and no one will buy a high-end phone that costs more than $1,000. This doesn't mean it's a good thing. Part of the reason behind this statement is how competition drives every industry and that companies work hard for every penny we spend is the victory for consumers.
Qualcomm will still face competition, but this is not the case with high-end customized 5G devices. MediaTek may be able to make a cost-effective chip, but it cannot compete with Qualcomm's Snapdragon 800 series or 700 series.
Samsung will still produce Exynos processors for phones and other devices, but existing ARM core configurations and off-the-shelf Mali GPUs cannot be compared with Qualcomm's billion-dollar R&D expenses (the device will prove it). No one knows exactly what Samsung intends to handle its new partnership with AMD, which will take several years to verify. And in these places, Huawei's HiSilcon chip is shining.
The chip produced by Huawei is indeed comparable to Snapdragon high-end mobile phones. Custom core configuration and a GPU, coupled with a very comprehensive AI coprocessor, means that Huawei's phones can match or even surpass all other manufacturers' flagships. This is no accident, as Huawei is very willing to spend time and money on making the best chips it can make.
But this is not the only factor that Qualcomm monopolizes the flagship mobile phone department to the industry. Qualcomm makes very good equipment, but there are some criticisms in other aspects. This was made public in the 2019 lawsuit between Qualcomm and Apple, but it was nothing new - Qualcomm used its position as leverage to get manufacturers to buy its Snapdragon chips.
This sounds innocent - Qualcomm has the patents needed for a good cooperation between the mobile phone and North American telecom network. It is willing to license these patents, but it will be cheaper to use Snapdragon and its integrated radio solution first before paying for these fees.
This brings two very bad things - raising the price of the phone itself and possibly driving downstream companies out of the industry altogether. Nvidia made Sheild TV and supported the product far more than Google's support time for its own Android devices. But we have never seen Nvidia phones because Qualcomm sets it too high. This sucks.
In the West, we may have never seen any device using Kirin chips, but it is disgusting to see a company that has so many innovations and is so difficult to get kicked out of the market because manufacturing is illegal under US trade laws. This is not good for everyone, we deserve better.
is also an impact on Taiwan, China and
According to international media reports, the Trump administration may adopt new measures to restrict the global supply of chips to Huawei. The new rule is that foreign companies using U.S. chip manufacturing equipment must first obtain a U.S. license to supply specific chips to Huawei. It is generally believed that the main purpose of the new US measures this time is to limit TSMC's supply to Huawei. It is not clear whether Trump will agree to the adjustment, but it has been widely involved and has attracted global attention.
In fact, since 2018, the Trump administration has actively used security and national security risks to lobby telecommunications operators and friendly countries to abandon Huawei products. However, due to the low cost and mature technology of Huawei equipment and the changing business cooperation relationships with mainland China, most markets are still open to Huawei.
Under this situation, the US Department of Commerce included Huawei on the list of entities for regulatory output in May 2019, directly regulating that technologies and commodities with a proportion of more than 25% of the US technology are not allowed to be supplied to Huawei, and attempts to start from the source. However, many American companies dilute the specific gravity of the US technology content through overseas OEM and other methods to avoid the restrictions on the entity list. Seeing that the ban is not effective, the market has recently reported that the US government will plan two more radical measures: first, reduce the US technical content standard from 25% to 10%; second, citing the "foreign direct product rules" in the export control regulations, treating products produced by "using US-made equipment" as "direct products" produced using US technology, and must obtain a US license before the product can be supplied to Huawei. If
adopts the first method and reduces the US technology content to 10%, it is rumored that TSMC can still supply Huawei itself. If the real situation is so, the chip shipment of representatives will be roughly as normal. The expansion of this ban may have little impact on Huawei's operations. If
is adopted, it refers to foreign direct product rules to ban it. Because TSMC's overall process has many equipment from US manufacturers, such as Applied Materials, Lam Research, Kelei, etc., these operators even occupy an absolute market position in some processes and cannot be replaced by other countries such as Dutch ASML. It is estimated that TSMC may not be able to produce the chips required by Huawei. Because most of the chips required for Huawei production are supplied by TSMC and it is difficult to have alternative sources, the US government can achieve the goal of completely hindering Huawei's development. If this ban measure comes true, since Huawei's leading mobile phone shipments in 2019 reached 240 million units, with a market share of about 18%, base station equipment market share of about 30%, and optical communication equipment market share of about 35%. Once all operators using US semiconductor equipment to produce chips, such as TSMC and Samsung, need to obtain licenses to supply Huawei. With such a large-scale reduction in Huawei's demand, these operators will inevitably reduce orders to US semiconductor equipment manufacturers, which will ultimately harm the interests of the United States.
The gap that Huawei cannot ship is theoretically possible if other competitors can successfully fill it, it may significantly reduce the impact on the global industrial chain. For example, mobile phones are expected to be replaced by Apple, Samsung (overseas market) and other mainland brands (in the Chinese local market), but the territory of the upstream supply chain will be reshuffled.
However, in terms of base station equipment, although there are still other options such as Nokia, Ericsson and Samsung in the market, due to compatibility issues and Huawei equipment is much cheaper than its competitors in terms of cost, the United States has strengthened the ban, and it is likely to postpone the global 5G network deployment process in the short and medium term, which will drag down the development of 5G business opportunities that were originally quite optimistic, including the market that American chip operators could get.
As for the impact on the industrial chain of Taiwan, Huawei's annual purchase amount of local operators is estimated to be more than US$16 billion, and most of the purchased products are high-end products, with better profits. Other competitors may not be able to give the same level of quantity and value. And if Samsung, which has always been purchasing local components in South Korea, takes over the market, the situation will be even more difficult to optimistic.
The U.S. government's ban on Huawei is still being discussed and may be adjusted dynamically at any time. Before the situation is clear, Taiwanese businessmen must be particularly cautious in their corresponding strategies. In addition to closely observing the development of the incident, they should prepare as soon as possible to ensure that the technical content and manufacturing processes comply with the specifications; and if Huawei is subject to order losses caused by impact, they also need to think about the way to respond in advance; in the long run, Huawei's case also reminds us that the establishment of independent technology is the fundamental way for the sound development of the industry.
The "Huawei dispute" between the United States and China will not end due to the epidemic
Another wave of tensions have emerged between the United States and China around Huawei Technologies Co., Ltd., and global chip manufacturers may become the losers in this dispute. The conference call held on Tuesday by
discussed the financial results of the non-listed Chinese-funded company, and also heralded a possible geopolitical tug-of-war. When asked about the Trump administration's potential further restrictions on its supply chain, Huawei's rotating chairman Xu Zhijun said he believes that "the Chinese government will not let Huawei be slaughtered." He added that if this Pandora's box is opened, global supply chains would be devastating.
The U.S. government is planning to introduce new restrictions that may prevent Taiwan Semiconductor Manufacturing Co., Ltd. from selling semiconductors to Huawei's own chip design company HiSilicon.
The war of words between China and the United States has hurt Huawei last year: the company's revenue in 2019 increased by 19% compared with 2018, but almost all growth comes from the domestic market with a growth of 36%. According to Canalys, Huawei's smartphone sales in the Chinese market rose 35% last year, although overall sales in the Chinese market shrank by 7%. Huawei phones have banned Google's most popular apps, after the U.S. government blacklisted Huawei in May last year, damaging its attractiveness in overseas markets. In response, Huawei has invested heavily in its technology: The company's R&D costs soared 30% last year to $18.6 billion, surpassing Apple Inc. and Intel Co. (INTC) spending.
As countries begin to launch 5G services, the battle surrounding Huawei may intensify. 5G wireless networks are at the center of the U.S.-China dispute, especially as China remains committed to developing 5G. China Mobile (CHL), the largest operator in China, has just announced the tender results for some base station contracts, which, according to Goldman Sachs, totaled $5.3 billion. The Chinese government may view building wireless infrastructure as an economic stimulus after the coronavirus outbreak has caused economic damage.
Washington's offensive against Huawei may continue to hinder the company's development overseas while stimulating it to achieve self-sufficiency. This is particularly bad news for US chip manufacturers such as Qorvo Inc. (QRVO), Skyworks Solutions Inc., SWKS, etc., but the impact may also extend to other companies such as TSMC. In addition, the global economic recession triggered by the coronavirus pandemic is vaguely visible, which will also affect the demand for 5G phones, which should have been another potential growth point for semiconductor companies this year.
Huawei’s legend is a major technology event in 2019. Despite the changes brought about by the 2019 coronavirus disease (Covid-19) there is no reason to think that the "Huawei dispute" between the United States and China will end this year due to this epidemic.
*Disclaimer: This article is original by the author. The content of the article is the author's personal opinion. The reprint of the Semiconductor Industry Observer is only to convey a different view, and does not mean that the Semiconductor Industry Observer agrees or supports this view. If you have any objections, please contact the Semiconductor Industry Observer.
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