Huawei May Be Forced To Use Snapdragon Chips In 2021
Huawei may ultimately be forced to turn to Snapdragon chips
for its 2021 flagships — tentatively the Huawei Mate 50 and P50. That's
according to recent reports citing KeyBanc Capital Markets analyst John Vinh.
Mr. Vinh indicates that Huawei likely won't be able to use
HiSilicon to source chipsets for its cutting-edge smartphones in 2021. That's a
direct result of sanctions and rules created amid an ongoing trade war between
the US and China.
It's also the result of a decision made by the current US
administration to add Huawei to an Entity List. A successive run of sanctions
has forced the company to look for internal solutions and not all of those
appear to be panning out.
The analyst says that one likely result is that the company
will be forced to utilize Qualcomm's Snapdragon chipset in its flagship phones
in 2021. While Huawei can obtain enough hardware from current loopholes in the
sanctions to power its Mate 40 and P40, it won't be able to next year. That
would mean that the Huawei Mate 50 and P50 could be powered by the top Snapdragon
chips for that year instead.
Of course, Huawei has its own AI-focused in-house Kirin
chipsets built by its HiSilicon subsidiary. Those have been driving the
company's smartphones and flagships for years as well as the handsets made by
Honor. So there may be some confusion as to why Huawei can't just use those
instead of Snapdragon SoCs in 2021. The issue at contention here is HiSilicon's
reliance on components for chips from US manufacturers.
A recent rule change, implemented in late April, will make
it difficult for Huawei to source those. Specifically, the rule — dubbed the US
Foreign Direct Product Rule (FDPR) — places controls on shipped content that is
at least 25-percent American-made. Summarily, it puts limitations on
American-made content is eligible for exportation to foreign countries.
As a result of a large number of related rules and sanctions
placed against the company, Huawei has been forced to shift manufacturing. In
mid-April, it moved production from TSMC to China-based SMIC, for instance.
All of that is compounding to make building around
HiSilicon's Kirin chipsets less feasible. In effect, the rules and sanctions
are beginning to make reliance on in-house hardware less feasible. Unless
Huawei can find some other way to get its components, it's going to have to
look elsewhere. Particularly for its popular flagships series devices.
Now, Qualcomm may actually be off of the table for Huawei
too. Whether or not that's the case will largely come down to yet another
decision by the US government. The benefits would arguably be weighted heavily
in Qualcomm's favor. But the US-based company would still be required to apply
for a license to interact with Huawei. That comes back to the Huawei being
placed on the Entity List, marking it as a plausible national security risk.
Additionally, Qualcomm would need to convince Huawei to
utilize its chips. Mr. Vinh does believe that the US government would grant the
requested license. But Huawei has increasingly isolated itself from US
companies. It's also claimed that it can overcome the sanctions on its own
merit, with its own solutions — simultaneously denying claims leveled against
it.
Qualcomm has already attempted to work out a deal with
Huawei on 5G technology and failed. So it may not be able to convince the
company to utilize its chipsets for mobile devices either.
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