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Trade War bringing down Huawei Through Chipmakers

Trade War bringing down Huawei Through Chipmakers

Previously, we spoke about the latest development in trade war, which is the recent Huawei’s ban by Donald Trump and The Toy War (alternate explanation of the trade war). Through the Huawei ban, Donald Trump is trying to disrupt Huawei’s technology advancement.

Chipmakers such as AMD, Intel, Qualcomm, Broadcom and Xilinx has pulled out of their business cooperation with Huawei to comply with the ban. It seems that Huawei’s efforts in making phones and other telecommunication ventures are crippled by this action.

That’s it, no more Huawei phones. It’s sayonara for Huawei.

Let’s look at facts instead of feeling sad.

The Semiconductor Industry

Most laptops and computers runs on Intel chips. Top phones like the iPhone runs on the Apple-made SoC chips. The Samsung Galaxy S10 runs on a combination of the Samsung Exynos and Qualcomm Snapdragon chips. The Google Pixel runs on Qualcomm Snapdragon chips as well.

Many of Huawei’s products run on Qualcomm’s chips as well. Is this the end of Huawei? Huawei’s founder Ren Zhengfei said that Huawei is ready for such a ban.

Is he truthful? Well, I wouldn’t doubt him.

The semiconductor industry is dominated by US companies, with half of the top 20 semiconductor companies in the world being US.

That leaves another 10 that are not US companies. Here are the other 10 non-US semiconductor companies.

Name Country
Samsung Electrics South Korea
TSMC Taiwan
SK Hynix South Korea
Toshiba Japan
NXP Netherlands
Mediatek Taiwan
Infineon Germany
STMicroelectronics Switzerland
Sony Japan
Renesas Japan

And how about HiSilicon? Huawei’s very own semiconductor manufacturer.

One may not have heard of HiSilicon, however, their Kirin processors are getting increasingly well-known in recent years. With Android Authority doing a comparison test between the Kirin 980 and Qualcomm’s Snapdragon 845 in September 2018.

Their conclusion was, they have some opinions of the Kirin 980, but they had to concede that it does not mean that the Kirin 980 will be a very competitive chipset, and that it has set a high bar for Qualcomm’s Snapdragon and Samsung’s Exynos.

Other Chinese Semiconductors

There are also other Chinese semiconductors such as Semiconductor Manufacturing International Corporation, Fuzhou Rockchip Electronics, Action Semiconductor Co. Ltd and so on.

While it is unknown how the other Chinese Semiconductors can benefit Huawei, we can safely say that Huawei have alternatives, both internally and externally.

On The Long Run

Although it is true that the Chinese has not caught up in technology to the US, the progress in China has gone up by leaps and bounds within recent years and should not be underestimated.

If the US shuts all the doors towards Huawei and in general the Chinese, it is hard to see why the Chinese do not have a backup plan.

All the Chinese have to do is to open their own doors and create their own technologies. By then, even if the US reopen their doors, the Chinese may not need them.

On The Short Run

On the short term, the truth is, Huawei has been made a into a mess by the ban, having to source more parts and solve the Android OS problem. Qualcomm, Broadcom, AMD, Intel and other US semiconductor companies has just lost one big customer from China.

After the news about the chipmakers, it seems that this piece of news is one of the more fatal ones.

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