Huawei’s chip unit HiSilicon to see massive decline in 5G chip market this year
HiSilicon, Huawei Technologies Co’s integrated circuit (IC) design unit, is expected to be the biggest loser in the 5G smartphone chipset market in 2021 as US company Qualcomm and Taiwan’s MediaTek expand their presence, according to a new research note published by Counterpoint.
The Chinese chip firm had 23 per cent of the 5G phone
chipset market in 2020, but it is expected to see that share shrink to less
than 5 per cent this year. Its share of overall global smartphone chipsets,
which includes 4G, is expected to shrink from 10 per cent in 2020 to about 3
per cent this year, dropping out from the top five players, according to
Counterpoint.
The decline of HiSilicon’s business is a direct result of
the US government’s tightened sanctions last summer, barring semiconductor
companies from supplying Shenzhen-based Huawei with chips made using US
technology without prior approval, effectively severing the Chinese telecom
giant’s access to advanced semiconductors.
Huawei did not immediately reply to a request for comment.
HiSilicon was responsible for designing the Kirin processors
for Huawei‘s smartphones. However, as the company has no chip manufacturing
capacity of its own, it outsourced wafer fabrication to foundries like Taiwan
Semiconductor Manufacturing Co (TSMC). But under the tighter US sanctions,
HiSilicon can no longer do business with TSMC or other foundries because they
all rely to some extent on core US technology to make wafers.
Huawei’s rotating chairman Eric Xu Zhijun said last month
that the company will keep its HiSilicon chip unit for as long as it can,
despite the fact that it cannot find a foundry to make its chips.
HiSilicon’s loss has been MediaTek’s gain, with the fortunes
of the Taiwan-based chip designer rising amid US-China tech tensions. This
year, MediaTek retained its top spot in the so-called fabless chip maker
rankings over US-based Qualcomm, Counterpoint research shows.
MediaTek, which designs processors for mobile applications,
is the major supplier to Chinese smartphone vendors like Xiaomi, Oppo and Vivo,
which have collectively soaked up market share from Huawei after its handset
business was crippled by US sanctions.
MediaTek is expected to account for 37 per cent of the
global mobile chipset market this year, ahead of Qualcomm with 31 per cent,
Counterpoint said. Last year, MediaTek overtook Qualcomm to become the largest
supplier in this market, with a share of 32 per cent versus 28 per cent for the
US company.
“MediaTek is likely to continue its momentum [from] the
fourth quarter last year into 2021,” Counterpoint research director Dale Gai
said in the research note. “The potential annual uptick in demand is a function
of a competitive 5G portfolio powering sub-US$150 5G smartphone [chips]
manufactured at TSMC without any supply constraint, and growing share in the 4G
segment.”
He added that in the first half, MediaTek would benefit from
Qualcomm’s current supply constraints caused by disruptions at Samsung
Electronics’ Austin, Texas, wafer fab, where a deep freeze in February caused
widespread power outages in the state.
However, Qualcomm still leads in 5G chipsets with its market
share expected to reach 30 per cent in 2021, followed by Apple and MediaTek
with 29 per cent and 28 per cent, respectively.
Comments
Post a Comment