In 2021 Huawei may abandon their processors, but there is a solution

Oh, this whole situation with Huawei … We lived normally when there was another large manufacturer. Now they are trying to bring it to an end, and we are losing precious competition, but Huawei does not even think to give up. The company is actively looking for ways to further develop and, apparently, is already ready to abandon its proprietary processor in favor of third-party solutions, the choice of which is not so great, but chip manufacturers understand that hundreds of millions of chips sold per year are a very tasty piece of pie and they are trying to find loopholes that will help them continue (or for someone else start) cooperation with the Chinese telecommunications giant.

In 2021 Huawei may abandon their processors, but there is a solution

Kirin chips have long been a trademark of any flagship Huawei.

How Huawei develops without Google Play

Last year, Huawei had an important task – to find a replacement for Google services and its app store. The solution turned out to be Huawei Mobile Services, which the company was actively developing, and the AppGallery application store, which, fortunately, the company already had and was able to promote it. It may not yet replace Google Play one hundred percent, but for the vast majority of users, it has almost everything they need, and the rest can be installed through the APK. Only you need to use such a tool carefully, and I have already talked about why.

The ban on Google services is, of course, a blow, but next year the company will face even greater problems in the form of a ban on the use of processors that are created using American technology. With TSMC banned from manufacturing chips for its subsidiary Huawei – Hisilicon, the company will soon be forced to look for alternatives.

According to an industry insider, flagship smartphones Huawei in 2021 may run on a 5nm chip from a third-party manufacturer. The insider did not expand his comment, but the most likely contender for the supply of chips Huawei should be none other than MediaTek.

In 2021 Huawei may abandon their processors, but there is a solution

There is a lot of information, but is it always relevant?

This comment is a little confusing, especially if you've read reports of the 5nm Kirin 1000 or 1020 that are already set to launch this year. However, here he is talking about 5-nm chips for flagships Huawei 2021, and not about those that will be in the upcoming Mate 40.

US Sanctions for Huawei

In May 2020, the Trump administration added a new rule that barred overseas companies from supplying components for Huawei if they were made using American technology. Given that US hardware plays an important role in semiconductor chip manufacturing worldwide, this technically excludes TSMC, SMIC, and even Samsung from manufacturing chips for Huawei. The latter, however, according to earlier information, was not opposed to working with the Chinese, but called a very high price.

Despite the severity of the ban, the US has granted a grace period of 120 days before the rule takes effect. Therefore, TSMC can continue to supply Hisilicon chips until September 15, 2020.

For this case Huawei TSMC placed an urgent order for the production of 5nm chips. This means that the upcoming chipset Huawei Kirin 1000 or 1020 (name not yet confirmed) could be manufactured by TSMC and released as scheduled.

It doesn't sound so bad, but this is just one model. Let it be implemented, but what next? It is not necessary to count on the fact that the sanctions will be lifted, and the company needs to somehow develop further. Therefore, finding solutions is now among the top priorities of the company.

In 2021 Huawei may abandon their processors, but there is a solution

Everything was fine with the 990s. It won't be like that anymore.

If the US government does not extend the grace period beyond September, TSMC and other companies will not be able to produce chips for Hisilicon. This would leave Huawei very limited in scope. An alternative would be to purchase 5nm chips from third-party vendors so that next year's flagships Huawei are competitive even without Hisilicon's own chips.

Who Huawei can buy processors from

Since Qualcomm is a US-based company, this alternative seems unrealistic. In this case, potential suppliers remain MediaTek, and maybe even Samsung. Another company that could potentially produce chips for Huawei is ZTE. However, each of them will need to invest in production in order to bypass the US ban.

Such an approach is still very risky, because this is an investment of millions that can be canceled out by one new ban of the US government.

In 2021 Huawei may abandon their processors, but there is a solution

We didn’t take them seriously, but they might be the ones who will save Huawei.

Legal subtleties do not yet give a clear understanding of whether it is really possible to get around the ban so easily. Therefore, it is still impossible to say with certainty whether Samsung or MediaTek will legally be able to sell their own chips Huawei made using American technology. There are reports that TSMC and Samsung are considering building production lines without US hardware, but so far these are just rumors. Even if companies really do think about it, it is unlikely that everything has gone beyond the idea.

In any case, if such a circumvention of sanctions is implemented, it will be very expensive Huawei. The United States imposed sanctions not for a “tick”, but in order to win Huawei. Therefore, they will monitor the situation and take action. Companies that are willing to circumvent the ban will bear the risks that they want to recoup and, because of this, will greatly raise the prices of their products. Well, launching new lines is also not cheap. In short, Huawei get ready to fork out if she wants to “buy an umbrella before the rain”.

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