MediaTek has a huge chip stock for Huawei – what happens to it now?

MediaTek low-end 5G

The MediaTek Dimensity series has been a revelation since its inception. With the ban on Huawei, MediaTek had the opportunity of claiming huge deals from the Chinese manufacturer. However, that plan is now a bone on its throat. The latest ban from the U.S. suggests that MediaTek can not sell chips to Huawei. This is what the company has to say regarding Huawei’s ban.

Credits: MediaTek

“We have always followed global trade-related laws and regulations and is paying close attention to changes in U.S. export control rules and consulting external legal counsel. we will obtain the latest regulations and conduct legal analysis to ensure compliance with relevant rules. Based on existing information evaluation, it has no significant impact on our company’s short-term operating conditions”.

Looking at its latest statement, MediaTek must also abide by the US ban. This also means that MediaTek’s mobile phone chips will be cut off from Huawei. After all, MediaTek is also inseparable from the US EDA software.

MediaTek said that “according to existing information, it will not have a significant impact on the company’s short-term operating conditions”. However, there are reports that MediaTek’s 5G chip stock for Huawei is about 30 million sets. What happens to these chips now that Huawei can no longer use them? MediaTek can now rely on other Chinese manufacturers like Xiaomi, Oppo, and Vivo.

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As you can see from the image above, MediaTek’s 5G mobile phone sets include 5G SoC, RF, WiFi, PMIC, Sub-PMIC, Buck chips, etc. This also means that if MediaTek cannot deliver the 30 million sets to the likes of Xiaomi, OPPO, and Vivo, it may face considerable losses. Moreover, even if these three companies are willing to help MediaTek digest, they may have to bargain significantly.

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Huawei rather move forward and die than move backward

The ban stops TSMC from producing Huawei’s chips. It also stops Huawei from outsourcing chips. This is because most chip makers use American technology in one way or another. Thus, the Chinese company does not have another choice but to abandon the deal it has with MediaTek.

Of course, the current ban has only just been announced, and companies still need to conduct detailed studies by the relevant legal departments before making a final decision. Therefore, in the short term, chip manufacturers may continue to supply Huawei.

As for Huawei, it is still in intensive meetings to study and judge the new US ban. A Huawei insider said: “Last night we had another meeting until midnight. The boss’s attitude is to step forward and die rather than take a step back”.

Source/VIA :
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