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By Wu Yuzhen
Source: zinc Finance (ID: xincaijing)
Hisilic Kirin has enabled Huawei to end the blank in the field of high-end chips, and has proved Huawei’s ability to the world. However, Kirin chips, which have been shining on the world stage for less than a decade, will be forced to end in a month.
On August 7, the 2020 summit of 100 people’s Conference on China’s informatization was held in Bantian base of Huawei in Shenzhen. Yu Chengdong, CEO of Huawei’s consumer business, brought happiness and sorrow to everyone.
Happily, Huawei’s new flagship work mate 40 will come into the market this autumn, and it will carry Kirin 9000 chips. But sadly, due to the crackdown and sanctions imposed by the United States on Huawei, Kirin chip orders are only allowed to be produced until September 15, which means that Kirin 9000 may become the best of Huawei’s Kirin series chips. Similarly, the mate 40 series that will be on the market may not be all They all carry Kirin chips.
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Huawei is never cowardly. At that time, ZTE suffered heavy losses due to the US ban on ZTE, and its market share declined sharply. However, Huawei’s fighting posture and strong technical strength made it famous in China, and its sales volume in the domestic market also increased significantly, which to a certain extent offset the impact of sales decline in overseas markets and gave Huawei the opportunity to adjust and prepare for the war.
How should Huawei deal with the new round of sanctions?
Both China and the United States will be hit by major changes in the chip supply chain
The U.S. sanctions ban on Huawei is that any non-U.S. chip manufacturer must first apply to the U.S. government and obtain a license before they can use U.S. technology and tools to supply Huawei.
As a result, TSMC, which has not applied to and obtained permission from the U.S. government, cannot process any new orders from Huawei and its Hisense semiconductor company since May 15, and must complete the original orders before September 14.
According to the ban, not only the purchase orders from TSMC, but also Huawei’s chip purchase orders from Qualcomm are being hindered by the U.S. own ban.
According to foreign media reports, Qualcomm is lobbying the trump administration to remove sanctions against Huawei. Because Qualcomm believes that the U.S. export ban will not only prevent Huawei from obtaining the necessary parts, but will also lead to the company ceding billions of dollars worth of orders from Huawei to other overseas competitors.
There are a large number of chip related enterprises in the United States, and all of them are closely related to China. In addition to Qualcomm, a series of chip technology companies and manufacturers such as Intel, NVIDIA, RAM research and general Monet have a large number of orders coming from the Chinese market. According to the data, the export volume of us chip industry in 2019 is 46 billion US dollars, of which 8.8 billion US dollars are from China. And the company with 41% market share, occupy the first place.
Therefore, the ban of Huawei by the United States, or the crackdown on other Chinese technology brands in the future, may also bring a major blow to American technology enterprises themselves.
Alternative chips are hard to find, SMIC still can’t make the connecting rod
At present, TSMC and Samsung are the two leading manufacturers of high-end chips. TSMC has to give up its cooperation with Huawei due to the ban. Samsung has not sold a large number of high-end chips to other companies before. If Samsung fails to reach a cooperation with Huawei, the best choice left is to purchase chips from “black horse” MediaTek.
It has also been rumored that Huawei has urgently increased chip purchase orders from MediaTek by three times.
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However, the authoritative media Android authority believes that the existing high-end chip Tianji 1000 of MediaTek can not replace Huawei’s flagship Kirin chip, because even though the chips of both sides have been at the same level in terms of performance, there is still a gap between them in terms of brand positioning and self-study uniqueness.
Taking Kirin chip as an example, although it uses the core general CPU core belonging to arm, Kirin SOC contains ISP independently designed by Hisilicon. The built-in BM3D noise reduction algorithm and the unique ryyb sensor technology make the image performance of Huawei mobile phone significantly improved.
Secondly, Da Vinci architecture also makes Kirin SOC more perfect, which includes low-power voice, gesture control, face recognition, security and other functions, which is a concentrated display of AI capabilities. So it is not easy to find a chip that can replace Kirin perfectly in a short time.
Since it is difficult to find a manufacturer to produce, it is natural to think of finding a large domestic chip manufacturer, SMIC international.
Although SMIC international has been catching up in recent years, it has not been able to achieve mass production in 7Nm process chips, and the yield has always been the problem. In terms of production capacity, SMIC’s 8-inch production capacity is 233000 pieces / month, and 12 inch production capacity is 108000 pieces / month. The total production capacity is 476000 pieces / month (equivalent to 8 inches).
In contrast, TSMC’s capacity is several times that of SMIC. The company has an 8-inch production capacity of 562000 tablets / month, nearly twice and a half times that of SMIC. The 12 inch production capacity is 745000 pieces / month, which is 7 times of SMIC international, and the gap is still very large.
In the short term, it is very difficult for SMIC to take over the scale chip orders signed by TSMC and Huawei.
How does Huawei break through the blockade?
In 2019, Huawei was listed on the list of entities of the U.S. Department of Commerce’s Bureau of industry and security, which means that the United States will ban the export of products containing U.S. ingredients to China, including materials, chips, parts, etc.
On the night of being listed in the “entity list”, he Tingbo, President of Huawei Hisilicon, issued an open letter announcing that all Huawei’s “spare tire” chips had become regular.
Ren Zhengfei was interviewed many times and sent three big signals to the outside world: Huawei has not done anything illegal; Huawei products can still be used normally without American parts; Huawei has the ability to continue to serve customers. Huawei’s fearless attitude towards US sanctions and its technical confidence have made the US government loose its mouth and say that US enterprises can continue to supply goods to China.
In the face of this round of U.S. sanctions, Huawei has also been fighting with all its strength.
Recently, some media quoted people familiar with the matter as saying that Huawei launched a project called “Nanniwan” this month in response to the US technology crackdown and blockade. The core goal of the project is to avoid the application of American technology in the process of manufacturing end products, so as to accelerate the “de Americanization” of the supply chain.
Ren Zhengfei has also said many times that only by gaining absolute voice in technology can we be based on the whole market. At present, Huawei has come to the point of “self-sufficiency”.
In terms of market share, Huawei has expanded rapidly in recent years. Both mobile phone products and other non mobile products (PC, wearable, watch, bracelet, headset, tablet) sell well. According to its financial report in the first half of 2020, Huawei did not suffer from a decline in performance due to the impact of the epidemic. Instead, it continued to rise head-on, with sales revenue of 454 billion yuan, up 13.1% year-on-year
The adjustment and development of other product lines and domestic market offset the negative impact of chip sanctions to a certain extent, but the chip is always a barrier.
Recently, Huawei has attracted “talented girls” with a million high salaries and Ren Zhengfei has visited four famous schools in three days. It is easy to see that Huawei’s investment in technology is increasing.
From the enterprise strategy to the production planning, and then to the employment of talents, it is intended to enhance the core technology level of the enterprise.
For Huawei, the pressure from the United States is heavy, but the exchange may be the upward momentum of the enterprise. In the face of technology restrictions and policy prohibitions, Huawei must improve its own research technology level, improve its supply chain structure, and get rid of the shackles of the United States.
The “de Americanization” of leading enterprises such as Huawei also has a huge driving effect on industrial resources.
In April of this year, SMIC directly pulled the entire 14 nm process chip production line of SMIC because Huawei separated Kirin 710A orders from TSMC.
The battle for high-end chips is a tough battle. The crackdown from the United States may make Huawei and related industrial chains grow more rapidly.
“If a person’s life is too smooth, it may be a disaster. If you look back and look at it, you will find that the setbacks you have suffered are usually blessings rather than disasters.” Ren Zhengfei once said. Kirin 9000 may be the best of Kirin series chips, but it will not be Huawei’s.
(statement: This article only represents the author’s point of view, not Sina’s position.)