The U.S. Department of Commerce recently announced measures that allow U.S. authorities to require licenses to sell semiconductors that are manufactured by foreign companies using U.S. technology. This led to the suspension of new orders for Huawei by TSMC, which is the largest manufacturer of custom chips.
The chips that are already in production, as well as the orders accepted before the announcement of the sanctions, are not affected and can continue to be executed if they can be delivered before mid-September. These products are used by the HiSilicon chip division behind the Kirin chipsets.
According to the Nikkei Asian Review, Huawei is in talks with other manufacturers such as MediaTek and Unisoc to deal with the new restrictions. The company recently unveiled its first 5G chipset from MediaTek, the Huawei Enjoy Z, which uses the Dimensity 800. MediaTek provides solutions for a number of other manufacturers, including OPPO, Vivo and Xiaomi.
As early as last year, the Chinese began transferring more low-end and mid-range model projects to MediaTek, and are now among Taiwanese key customers for the Dimensity 800 chipset. larger volumes than usual for the last few years.
Another potential partner for Huawei is China’s Unisoc, but it only produces products for low-end devices. Last year, the company accelerated its development of 5G chips, receiving $ 630 million in funding from a Chinese fund.
HiSilicon currently has 10,000 engineers, relying on TSMC’s high-end Kirin chips, as already mentioned. Taiwanese also produce network processors for 5G base stations, AI and server chips. Through its partnerships with TSMC and other companies such as Win Semiconductors, Advanced Wireless Semiconductor and Semiconductor Manufacturing, Huawei has largely succeeded in replacing the American manufacturers it had previously relied on.
In the meantime, however, the United States has announced its intention to monitor the situation and make further changes to the restrictions if they are circumvented. This may at some point affect a wider range of companies that will be banned from trading with Huawei.
The use of their own chipsets gives an advantage to smartphone manufacturers over others who can only rely on external developments. In this way, the competition on the market of terminal devices also increases. According to GF Securities, Huawei currently has enough stock of chipsets, which will reach it by the end of the year.
All chip manufacturers use equipment from the same companies, and these are the American Applied Materials, Lam Research and KLA. They must apply for licenses that allow them to sell equipment to manufacturers that work with Huawei. There are also alternative machines, such as those of the Japanese Tokyo Electron, but they need to be redesigned as they are tuned to work with other components.
Sources: Nikkei Asian Review, CNMO, Reuters