For months, Huawei lived in a scene of a thousand pounds hanging hairs. A law issued by the Trump administration in May stipulates that any company that sells chips using US technology and equipment to “blacklisted” companies after September 15 will must be licensed by the US Department of Commerce. For Huawei, this regulation has only one meaning: TSMC (Taiwan), Samsung (Korea), Sony (Japan) or any other chip manufacturer will have to ask for permission from the US if they want to sell. chip for Huawei.
Immediately, Huawei and its suppliers had to race against time. Huawei rushed to import all possible chips before the September 15 deadline, including those that have just been shipped, that have not been tested for quality. The No. 1 smartphone maker in China (and the world) suddenly faces a terrible risk: without chips, Huawei will have nothing to produce, no products to sell.
Within a week of Huawei’s chip supply cut, AMD and Intel announced that they had received a license to cooperate with the Chinese company.
However, just three days later, AMD, the world’s second largest PC chip maker – and also an American company, announced it was licensed to “do business” with Huawei. Just a few days later, it was Intel’s turn to claim that it would receive the same license. Thus, within a week after launching the finishing blow, the United States threw Huawei to two life-saving buoys.
The real victim of the ban
According to Huawei’s own announcement, another US company, Qualcomm, is also applying for a license to sell chips to Huawei. It’s unclear if this application will be successful, but at least for AMD and Intel, Huawei has a way of life.
AMD, Intel, and Qualcomm have two important things in common: they’re all American companies, and they’re all companies that sell finished chips. AMD and Qualcomm even have no manufacturing plant, but only operate on a fabless model – designing, outsourcing and selling finished products to manufacturers.
Huawei, or rather Huawei’s HiSilicon subsidiary, is also a fabless company. For many years, HiSilicon designed Kirin chips for Huawei smartphones, creating unique advantages in the field of photography in particular and AI processing in general. HiSilicon’s chips will be designed by TSMC or SMIC before being put on Huawei / Honor smartphones.
Huawei smartphones will probably continue to survive, but Huawei chips are almost certainly not.
When Huawei only has the right to buy AMD / Intel chips (and possibly Qualcomm), HiSilicon becomes meaningless. SoC chips, the most core component of a Huawei smartphone or any other device, are wholly supplied and controlled by US companies.
By the end of August, when the day of the judgment drew near, the source “lying” in the supply chain, DigiTimes, said that HiSIlicon employees were leaving Huawei in droves. Previously, Huawei itself also announced that the Mate 40 will be the final product using the Kirin chip. Now, with the right to buy AMD / Intel chips, Huawei smartphones will probably continue to survive (Google and Intel have collaborated on developing Android on x86 since 2013). But the real victims are Kirin and HiSilicon. Having lost access to its outsourcing partners, Huawei has also lost the ability to design its own chips.
Those who watch the US-China trade war may have noticed a special point: the US government has dealt a lot of pain on Huawei but has absolutely never touched other Chinese companies like Xiaomi. , Lenovo / Motorola or BBK (parent company of OPPO, Vivo, Realme …). Even BBK’s sub-brand OnePlus is currently widely sold in the US, and so is Motorola.
American chips will replace Chinese chips to become the “soul” of Chinese smartphones.
The biggest difference between Huawei and the rest of the Chinese names are the chips. Except for Huawei, all of the Chinese smartphone makers are still using Qualcomm’s Snapdragon chips. After being opened up to AMD and Intel, Huawei will also resemble fellow “countrymen”, will also depend on the products of US companies.
That is probably the scenario the Trump administration is really aiming for. Putting Huawei in the dead end won’t do any good: Huawei is now focusing on the Chinese market only and is also the dominant player at home. Removing Huawei will certainly not help US companies enter China to take their place – possibly even harming Apple, Qualcomm, Microsoft …
Opposite, Huawei can become a sales channel for US companies in China. The Trump administration is and probably will only license companies selling finished chips from the United States. Here’s how the United States can both generate revenue from a “blacklisted” company like Huawei.
Why eradicate Huawei when it can be the distribution channel for AMD, Intel (and Qualcomm?) Chips in China?
In the last days of September, Reuters and the Financial Times finally published information that SMIC will soon be subject to an “embargo” from the US. According to these sources, the Trump administration will increase control over exports to China’s No. 1 chipmaker, once considered the “lifesaver” of Huawei.
The picture of the future is getting clearer day by day. On the one hand, Huawei will be “saved” by the source of finished goods from the US. On the other hand, Huawei and SMIC are likely to have their autonomy in semiconductor technology cut off. Again, this is still the best-looking scenario Mr. Trump is really aiming for: America retains control over Chinese equipment, American companies still make revenue from these devices. .