According to Canalys, IDC, and Counterpoint, Chinese manufacturer, Huawei, is currently the world’s highest smartphone brand i.e. for the second quarter of 2020. This is quite interesting considering all the hurdles that the company had to scale. This is also the first time that Huawei is surpassing Samsung as the world’s largest smartphone brand. However, can Huawei remain on the throne?
Due to the extensive use of American technology and equipment, after September 2020, TSMC and SMIC can no longer produce chips for Huawei HiSilicon. Huawei’s consumer business CEO, Yu Chengdong, has since confirmed that Huawei’s flagship Kirin chip can not continue for now. The reason is obvious, due to the U.S. ban.
So the first thing facing Huawei is not competition, but survival. What are Huawei’s options?
To keep its mobile phone business running normally, Huawei must purchase third-party chips. However, the company does not have many choices
Option 1. Samsung
This option is not actually an option because Samsung is completely ruled out. For starters, there will be a conflict of interest as they are rivals. Secondly, Samsung’s chip production adopts the IDM model, and its flagship process problems frequently occur. This has led to the transfer of Qualcomm’s 5nm orders to TSMC.
Option 2. Qualcomm
Huawei can use Qualcomm chips as an alternative, but Qualcomm’s priority should not be too high. After Huawei paid $1.8 billion in “patent fees” to Qualcomm, there are reports that the two are ready to do business. However, Qualcomm is American and it needs a license from the American government. We can not be too sure that Qualcomm will get the license.
Option 3. Ziguang Zhanrui
Little known Ziguang Zhanrui is actually a viable option for Huawei but only as a support to its main supplier. The development of this company over the years has been rapid. At the beginning of this year, it launched the Tiger Ben T7520 based on the 6nm EUV process. Therefore, Ziguang Zhanrui can also become an ideal choice for Huawei. However, the 6nm EUV process of Ziguang Zhanrui still needs TSMC foundry. The more mature 6nm will arrive after 5nm mass production, and the uncertainty in this process is relatively high.
Option 4. MediaTek (most likely)
MediaTek seems to be the best choice for Huawei presently. Firstly, the company has a long and good relationship with phone manufacturers in mainland China. Also, MediaTek is a Taiwanese enterprise, so placing orders with TSMC will not be too difficult. Relative to Qualcomm and Ziguang Zhanrui, Huawei will most likely choose MediaTek. This year, MediaTek has won a large number of orders from the Chinese manufacturer. Presently, its Dimensity 800 series SoC is on a variety of Huawei and Honor mobile phones.
It seems that the cooperation between Huawei and MediaTek is moving towards a win-win situation. MediaTek can help solve Huawei’s problem of chip supply; Huawei can help MediaTek increase its market share. However, is MediaTek really reliable for the Chinese manufacturing giant? Here are some down points of using MediaTek
MediaTek’s “down points”
- MediaTek’s biggest problem is that it has never been able to successfully tear off the “low-end” label. This means that even if Huawei chooses MediaTek, its high-end series will continue to suffer.
- MediaTek will take orders from other long-standing manufacturers. This means that it may not have the capacity to meet Huawei’s needs.
- MediaTek’s Dimensity series is good but it is not “king” of flagships. At best, it is still “king” of the mid-range segment.
- MediaTek has not yet fully proven its reliability
Despite these cons, MediaTek seems to be the best bet for Huawei presently. No matter which third-party supplier Huawei chooses as an alternative, it is not enough to compete at all levels. China badly needs to develop its chip manufacturing industry.