Categories: Technology

Huawei may be left hanging high and dry by Samsung in chipmaking

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Huawei may end up not working with Samsung for chipset production. They still have a year left to plan their next steps.

Huawei has had a tough year so far in terms of finding a saving grace. Since May 2019, the company has been reeling from the U.S. ban on their company. The U.S. has been hard on Huawei, thereby causing the Chinese company huge drops in sales worldwide.

Nonetheless, the company is keeping its head up with their strong local presence. Up to when that will last, no one can tell. The biggest damage to them is their difficultly in chipset manufacturing. TSMC was told to shut down its business with Huawei. Qualcomm and MediaTek are also out of the picture.

The last saving redeemer of Huawei is Samsung. Unfortunately, that may also end up being just false hope.

Samsung may not work with Huawei

The Korean company has been ramping up its foundry business since the start of the year. They are still a bit behind Qualcomm in terms of innovation, but they have the assets to catch up. Earlier during the year, Huawei was allegedly knocking on Samsung’s doors to accept its requirements for chipset production.

Many news sites picked up the rumor, but no head honcho was able to confirm nor deny the news. Now, it would seem like those rumors are being put to rest. Several industry observers are speculating that Samsung will not work with Huawei.

Why not?

The speculations have many basis to latch on. First is the effect of the partnership in Samsung’s goodwill with the U.S. Should Samsung work with Huawei on this deal, they may end up being on the target of U.S. for simply being in the same boat as the Chinese company.

Second, Huawei beat Samsung as the world’s largest shipper of smartphones last April. It was the first time that Samsung was beaten in recent years. There just seems to be no incentive for Samsung to help Huawei beat the former in its turf.

Third, the Chinese tech giant is being pushed towards a corner in this situation. They don’t have anymore quick solution to their supply problem. As such, Huawei has to foot a steep bill to work with Samsung.

Huawei’s next steps

The Chinese company still has a whole year worth of chips it acquire from their last TSMC transaction. That should be enough to last them until the middle of 2021. They, in principle, still have almost a year’s worth of time to determine their next steps.

They could eventually just be self-sufficient and ramp up the action in their Kirin foundry.

Image courtesy Huawei/ Youtube

Steven Hung

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Steven Hung

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