The ongoing trade war between the United States and China appears to have particularly dramatic consequences for Huawei Technologies. Not only has the company lost contracts for 5G equipment in several countries and can no longer buy hardware and software from US-based companies, but its subsidiary HiSilicon has lost access to semiconductor manufacturing. since September 13, which largely stops its flea activity. But one analyst thinks ending HiSilicon's chip operations could be a good thing. HiSilicon's high-end Kirin systems on a chip for smartphones compete head-to-head with high-end SoCs from leading developers like Apple, Qualcomm and Samsung. In addition, HiSilicon is developing processors for desktop and server computers, as well as for accelerating AI. Without a doubt, HiSilicon is one of the most advanced SoC designers in China and its eventual demise will affect the competitive positions of Huawei in particular and the country in general.
There are no chips for Huawei
Under new regulations recently imposed by the US government, any chipmaker using equipment made in the US must obtain a license before selling to Huawei. Unless authorization is granted or sanctions are lifted, the rules prohibit any semiconductor subcontractors -- TSMC, UMC, SMIC, and GlobalFoundries -- from making chips for Huawei. HiSilicon admits that the restrictions put its survival at risk, because it can no longer produce its SoC anywhere, unless it obtains a license that the US Department of Commerce is hardly willing to grant. Since a factory-less chip developer who can't produce their own designs anywhere is essentially burning money, Huawei could wind up HiSilicon's chip operations, largely dissolving this business. At the same time, HiSilicon's talent will clearly enhance the potential of other factory-free chip designers in China. "The possible breakup of HiSilicon could accelerate the growth of Chinese start-ups without factories: a boon for China-oriented design services companies like Alchip and VeriSilicon, in our view," Szeho Ng, an analyst at China Renaissance Securities, wrote in a note to clients Today, there are more than 2.000 IC design companies in China, up from 700 in 2015, so HiSilicon's talent will not remain unemployed for long and add value to these companies. For China and its "Made in China 2025" plan, such a turn of events can be seen as a positive because the government wants the country to succeed in the long run (and therefore might consider HiSilicon its Fairchild). On the other hand, the CPU and SoC markets are very mature and it will take years before some startups today can compete with the market leaders, which HiSilicon can do today. Via EE Times