As part of the China-US trade war, when the US government effectively forced Huawei’s subsidiary HiSilicon to withdraw from the smartphone chip business last year, Qualcomm and MediaTek filled the gap left by Huawei. The Chinese government-backed Huawei and its chip design arm HiSilicon are leading the global smartphone business and are ready to dominate the 5G business, just as the administration of former US President Donald Trump banned chip foundry TSMC, from supplying semiconductors to HiSilicon.
At this time last year, HiSilicon accounted for about 15% of TSMC’s sales, making it the second largest customer of TSMC after Apple. Now, TSMC no longer supplies chips to HiSilicon, which has left a huge gap for Qualcomm and MediaTek. According to market research firm Strategy Analytics, Qualcomm led the smartphone application processor market with 40% revenue share in the first quarter of this year, followed by MediaTek with 26% and Apple with 20%.
Strategy Analytics analyst Sravan Kundojjala said: “The trade war has reshaped the global smartphone application processor (AP) market in the first quarter of 2021.” According to data from Strategy Analytics, the global smartphone AP market grew 21% year-on-year in the first quarter of 2021, reaching US$6.8 billion. 5G APs accounted for 41% of total smartphone AP shipments this quarter. The market research company said that entry-level 5G APs such as Qualcomm’s Snapdragon 480 and MediaTek’s Dimensity 700 will help reduce the price of 5G smartphones in 2021. Kundojjala said that growth will continue until 2021, driven by the combination of 5G additional access points and increased demand after the pandemic.
Huawei seems determined to continue to be a major player in semiconductors and leading electronic products, even if this may not include 5G telecommunications. Catherine Chen, director and senior vice president of Huawei, said in an interview with Nikkei Asia that Huawei has no intention of restructuring its chip design subsidiary HiSilicon. Chen said in an interview that HiSilicon has more than 7,000 employees in 2020. It is a private enterprise and is not affected by external forces. The company’s management intends to keep HiSilicon.
It is expected that the battle for high-tech dominion between the United States and China will continue. Huawei is still developing proprietary technologies in a research center that is regarded as the modern Noah’s Ark. The center is a treasure house of leading technologies that can overcome many difficulties, as per the Nikkei report. Chen was quoted as saying that HiSilicon will obtain new supply chain partners in countries that promote their own semiconductor industry and do not rely on American technology. The company has also entered new businesses, including designing silicon chips for ultra-high-definition televisions and other types of consumer electronics.
