This month, Huawei closes a year off the U.S. In addition, the US government has extended the company’s exclusion for another year. This makes the situation very difficult, and the Chinese manufacturer will have to find solutions for the supply of components for the construction of its smartphones.
The problem with processors and Mate 40
Exclusion creates a problem in the supply of chips from TSMC, which is the largest supplier of HiSilicon Kirin. This is because one of the rules set by the government states that any product using US technology must obtain a special permit before being shipped to Huawei. However, there is a small way out, albeit a temporary one.
The US government allows Huawei to purchase chips and other similar components using US technology, as long as they are shipped by September 14th. This means that it will be able to provide a stock that will allow them to produce several Kirin 1020 5nm for the Mate 40 series.
What will happen after Mate 40
Analysts are looking at the course of Huawei after the release of Mate 40, and mainly from 2021 onwards. Although the company will be able to secure several chips for the flagships that will be released in the second half of 2020, it may turn to unprecedented alternatives for next year’s flagships.
Huawei has already begun transferring its business to its new partner, SMIC, based in China. However, SMIC is not as advanced as TSMC. At the moment, the company is producing a 14nm chip, and the flagships are light years ahead. We’ve already said that the Mate 40 will have a 5nm processor.
Of course, Huawei will help SMIC evolve to improve its products and products. It has already commissioned the manufacturer to produce the Kirin 710A, and SMIC has begun construction of a new line that will focus on producing 7nm and 8nm chips.
Although all this is positive, SMIC does not have the necessary equipment and it will take a long time until it is ready to produce 5nm chips. Simply put, it will not be able to produce the chips Huawei will need in the 2021 flagships.
Based on all of the above, KeyBanc Capital Markets analyst Jonh Vinh made one of the most controversial statements we have ever seen. The analyst said that the Chinese manufacturer will turn to Qualcomm and use Snapdragon processors so that the Huawei P50 and Mate 50 will be released in 2021.
Of course, in order for Huawei to do that, it will have to sign an agreement with Qualcomm, which will apply for a permit from the US Department of Commerce’s Office of Industry and Security. According to Vinh, in this case the government will not reject Qualcomm’s request.
In addition, Qualcomm has been trying for a long time to sell 5G modems to Huawei, so such an agreement will bring it one step closer to its goal. The analyst says that the US has excluded the Chinese manufacturer because they fear for national security and the equipment of 5G networks, so they are not so interested in smartphones that are addressed to the consumer public.
In any case, an agreement between Qualcomm and Huawei will greatly benefit the United States, so the analyst finds no reason for the government to reject it.
Vinh’s report makes perfect sense, but even if the United States rejects Qualcomm ‘s request, it has become known that Huawei is considering alternatives to MediaTek’s processor supply.
