What does the future hold for Huawei’s smartphone business?

Without its flagship chipsets, which vendor will come to rescue it? Will it be MediaTek, Qualcomm or Samsung?

Kochi: Chinese technology giant Huawei is running out of its flagship Kirin chipsets to power its smartphones when new sanctions take place from September 15.

Huawei will be forced to stop production due to the geopolitical war with the US and will not have access to US components and Google Android OS.

Richard Yu, president of Huawei’s consumer unit, said at the ‘China Info 100 conference’ that the company cannot make its chips.

He said the second round of US sanctions will make Huawei’s smartphone production with no chips and no supply and 2020 may be the last generation of Huawei’s Kirin high-end chips.

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

Huawei’s Mate 40 (pictured above) is expected to be the last flagship to run on Kirin 9000 chipset, which is expected to be launched by end of the year and there is speculation that the device may run on MediaTek’s new Dimensity 1000+ chipset outside of China.

Despite the sanctions, Huawei became the largest global manufacturer in the second quarter of this year by overtaking Samsung.

However, Yu said that this year’s sales will probably be lower than last year’s 240m shipments.

The American chip company Qualcomm is lobbying the Trump administration and trying to get a special license to roll back restrictions on the sale of chipsets to Huawei.

If it happens, the market may see Qualcomm Snapdragon 865+ chipsets on Mate 40.

Industry experts said that Samsung is very unlikely to supply smartphone chips to Huawei and will not like to carry a risk in a challenging economic environment and the geopolitical situation.

The Korean smartphone player has given its chipset – Exynos 980 – to Vivo on devices such as X30, X30 Pro and S6, and before that with Exynos 8895 to power Meizu’s 15th-anniversary flagship – 15 Plus.

“It is a possibility that Samsung could provide chips to Huawei but the issue to be considered here should be whether Samsung will be pressured by the current US administration to not provide chips to Huawei,” Dr. Ramazan Yavuz, Senior Research Manager AT International Data Corporation (IDC), said.

Shobhit Srivastava, Research Analyst at Counterpoint Research, said that he is not confident that Samsung will leverage its technology to Huawei as there is competition in the high end.

“Samsung knows that Oppo or Vivo is not going to replicate their chipset but Hisilicon may do something about it,” he said.

For the time being, Yavuz said that Huawei could use both MediaTek and Unisoc and in the long term, if SMIC catches up in process node technology, Huawei may turn to SMIC for their chips.

In an alternative scenario, and again in long term, smartphone chip part of HiSilicon could be dissolved and independent company/companies could be spawning to supply to Huawei,” he said.

With the impact of the pressure from the US government, he said that Huawei’s premium smartphone business will be negatively affected.

“Huawei inventory levels are sufficient to last a 12 months timeframe but Huawei will need to become more and more independent,” he said.

Despite competing in the premium segment against Apple, which caught a good wind with 11 series, he said that Samsung and Chinese vendors are insistent on entering and winning a foothold in the segment.

In the smartphone space, Srivastava said that China will be a contributor for Huawei’s growth.

In the premium segment, he said that Huawei market share is expected to decline while Oppo and Vivo will get a little edge in 5G devices in China.

However, he said that Huawei may use the same old chipset for a year or two and not more than that.

“The Huawei ban is expected to continue even if Joe Biden becomes the next US President. It is a bigger issue and the FBI has also said about it. Huawei issue has become the talk of the town,” he said.

The US administration has blamed China for the Covid pandemic and accused Huawei of espionage, facilitating human rights violations and imposing a new national security law on the former British colony of Hong Kong.

However, Srivastava said that the state of 5G in China is going to be so huge and Huawei is going to be a big player and more than 50% the global 5G smartphones will be sold in China alone.

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