Huawei’s order with MediaTek increases by over 300%

Huawei brand

Huawei is one of three major smartphone manufacturers which is capable of developing its own processors. Huawei’s HiSilicon SoC accounts for 70% – 80% of its smartphones. However, this year the situation will probably change. Huawei is actively looking for Kirin’s alternative. According to reports, the number of Huawei’s order with MediaTek has increased by over 300%.

MediaTek Dimensity 1000 for 5G smartphones

Huawei usually cooperates with third-party mobile phone chip suppliers but the purchase is not large. The number of chips purchased by Huawei this year will increase significantly, especially for the order of MediaTek. Recall that MediaTek is only second to Qualcomm globally.

MediaTek is evaluating its capacity

With Huawei’s huge orders rolling in, MediaTek is also weighing its capacity. The Taiwanese chipmaker is also evaluating whether it has sufficient resources to meet Huawei’s needs. Not only is the purchase volume soaring, MediaTek chips will also enter mid- to high-end mobile phones. In the past, Huawei only uses MediaTek chips on low- and mid-end 4G mobile phones. This year, a large number of mid- to high-end 5G chips may be purchased.

MediaTek has responded to the rumors that Huawei purchased its 5G chips. MediaTek said that it has a good and long-term cooperative relationship with many Chinese mobile phone manufacturers. Although it did not say that Huawei has made purchases, the company is open for business with Huawei.

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While Huawei places orders with TSMC, it is also relying on SMIC to make some of its low-end chips. Although there is a gap between SMIC and TSMC, the former has made substantial progress in the 10nm / 7nm process. SMIC’s N + 1 process which is slightly behind  TSMC’s 7nm in terms of performance sold out in Q4 2020. Therefore, even if TSMC really cuts off supply to Huawei, we believe that SMIC and maybe Foxconn can help Huawei overcome the difficulties.

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Besides TSMC, Foxconn (another Taiwanese company) is ready to take Huawei’s orders. Recall that after the ban last year, Foxconn canceled all Huawei’s orders. However, Foxconn’s founder, Guo Taiming, has now said that the company is open to cooperate with Huawei and other Chinese companies.

Why is the U.S after Huawei?

It is now very obvious that the U.S. government is trying so hard to cut off Huawei’s supply chain. However, natural minds will always ask this question “Why is the US after Huawei?”. A popular answer will be “because it is controlled by the Chinese government”. Even if Huawei is owned by the Chinese government, is that a crime? Huawei has been banned from participating in the U.S. network construction. In fact, it does not sell its smartphones or other gadgets in the U.S. The question now is “why the dire need to collapse Huawei?”.

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