Huawei is negotiating with MediaTek to buy chips produced by TSMC


Huawei HiSilicon

Update: MediaTek sternly refutes this claim 

Chinese manufacturing giant, Huawei, is still at loggerheads with the U.S. over multiple issues. The American government has reasons to believe that the Chinese manufacturer is a “spy” for the Chinese government. Citing “national security”, the U.S. has placed a number of ban on Huawei. Initially, the U.S. was more interested in banning Huawei’s 5G. Subsequently, it wasn’t just Huawei’s 5G, it became anything Huawei. Presently, the company can not do business with American companies without a license due to the U.S. ban. Not yielding the desired result, the U.S. extended the ban to any company that uses American technology. The target for the latest ban is TSMC, the largest semiconductor company in the world and the brain behind Huawei’s Kirin chips.

Huawei

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. The Chinese manufacturer is actively looking for Kirin’s alternative.

The latest report from Nikkei Asia Review says that Huawei is exploring countermeasures against the US government’s tightening of export restrictions. Because direct transactions with TSMC, a major semiconductor foundry company, will become difficult, Huawei has begun to discuss the purchase of semiconductors produced by TSMC through MediaTek.

Huawei has begun to establish a new relationship with MediaTek. The company plans to purchase semiconductor chips for 5G mobile phones from MediaTek. Relevant sources claim that they are required to carry out a large number of purchases.

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Huawei is a proactive company and reports claim that it has stocked US key chips. Huawei’s current stock of US key chips can last the company for the next two years.

Huawei is also in talks with UNISOC

According to reports, Huawei is also negotiating with UNISOC, a subsidiary of Ziguang Group. It hopes to deepen cooperation in the semiconductor field, and it is possible to purchase semiconductor chips from the company.

Furthermore, Japanese companies, Sony and KIOXIA (formerly Toshiba semiconductor memory) will be affected by the new ban on Huawei. For KIOXIA, due to the reduction of the supply for Huawei smartphones, it is worried about its memory demand.

According to reports, the number of Huawei’s order with MediaTek has increased by over 300%. The Chinese manufacturer has been coping with the U.S. restrictions since the beginning of last year. However, it needs to rebuild a semiconductor procurement system. If it fails to do this, its future production of smartphones and communication base stations may be affected.

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