And the recent turmoil in the general election on the other side of the Pacific has also given the domestic market more speculation about Sino-US trade relations. Although it is too early to draw conclusions, it is clear from all sources that Huawei’s situation seems to be It has improved. The iceberg is slowly dissolving, but the most critical part is still getting stuck.
Qualcomm is unwilling to give up Huawei
As early as the end of October, the US Department of Commerce stated that the United States will allow more chip companies to supply Huawei, provided that the chips will not be used for Huawei's 5G business.
According to statistics, some supply chain manufacturers have already obtained Huawei licenses for some less critical components. For example, Samsung Display has been approved to supply OLED panels to Huawei, but the semiconductor chips used to drive the panels have not yet been approved. In addition, Sony, Howe Technology, Intel and AMD have also received partial approvals before this.
On November 5, Qualcomm confirmed in its fourth-quarter financial report that it had received a one-time payment of US$1.8 billion in patent fees from Huawei, and said that it had formally submitted an application for Huawei’s supply license. Therefore, Qualcomm is not willing to give up the fragrant fat of Huawei.
Earlier news broke that Qualcomm had been lobbying the US government, saying that not cooperating with Huawei would cause Qualcomm to lose 8 billion U.S. dollars in revenue, which is tantamount to giving up the market to overseas competitors. Due to Samsung’s technical run competition and MediaTek’s sudden outbreak of low-end mobile phone business, many mainstream mobile phone manufacturers have abandoned Qualcomm and chose Samsung or MediaTek.
So Qualcomm firmly grasps the key to victory, that is, Apple and Huawei. However, it was mentioned in a circulated report that although Qualcomm may have obtained a license to sell chips to China, the necessary restriction is that Huawei sells its glory, because Qualcomm cannot meet the needs of two smartphone manufacturers at the same time.
Lenovo's previous Qualcomm financial report and the sale of Honor "coincidentally" happened in the same time period, which is even more frightening. However, the changes in the external market environment are conducive to more and more news about Huawei, and Qualcomm’s threat of holding the "core" may not go too smoothly.
Huawei has SMIC to back up
In the middle of this year, SMIC, which has broken through the 14nm process, entered Huawei's sight. Soon, Huawei's mobile phone orders gradually began to tilt towards SMIC. Huawei transferred the 14nm Kirin 710A order originally in the hands of TSMC to SMIC. This also helped SMIC's revenue and performance in the first half of 2020 to hit a record high. In the first half of 2020, SMIC achieved a net profit of 1.386 billion yuan, a year-on-year increase of 329.8%.
The day before yesterday, SMIC disclosed its first three-quarter report since it was listed on the Sci-tech Innovation Board, and its performance reached a new high. In the first three quarters, the company achieved operating income of 20.8 billion yuan, a year-on-year increase of 30.2%; during the same period, it achieved a net profit of 3.08 billion yuan, a year-on-year increase 168.6%.
It is worth mentioning that the relevant US export controls confirmed by SMIC in early October this year will have a certain impact on capital expenditure plans. The third quarterly report shows that SMIC’s 2020 capital expenditure plan will be revised down from about 45.7 billion yuan to about 40.2 billion yuan, mainly due to the extension or uncertainty of the supply period of some machines due to the US export control, and some logistics reasons. Machine arrival is delayed. In this regard, Zhao Haijun and Liang Mengsong wrote in the third quarterly report: “The company is currently operating normally, and export controls will have a certain impact on the company in the short term, but the impact is controllable.”
will affect the next phase of Sino-US relations and its impact on trade. Lou Jiwei, a member of the Standing Committee of the Chinese People's Political Consultative Conference and former Secretary of the Treasury, said on Friday that even if Biden takes office as the US president, the United States' containment of China is inevitable. Sino-US relations will not be very good in the short term, and trade friction may not be reduced.
Xu Tao, chief electronics analyst at CITIC Securities, believes that we are long-term optimistic about the continued expansion of SMIC's mature process and large-scale production. The research and development of advanced processes below 14nm will continue to advance and make good progress. He believes that the company has the ability to surpass international second-tier manufacturers and is expected to become one in the long term. International first-line ranks, domestically produced chipsReplace the core subject.
This report was produced by Hexin Securities Investment Consulting Co., Ltd. The company has the qualifications for securities investment consulting business approved by the China Securities Regulatory Commission. This report is a market analysis report. The information in the report comes from the public information that we believe to be reliable, but our company does not make any comments on the accuracy and completeness of this information. Guarantee. Investment is risky and you must be cautious when entering the market. The information, opinions, etc. in this report are for reference only and do not constitute the supporting evidence.
