The latest report released by market research firm Counterpoint shows that following the US government effectively cut off Huawei’s access to advanced chips, Huawei has run out of smartphone chips designed by its subsidiary HiSilicon.
The South China Morning Post reported that Huawei and HiSilicon were placed on the U.S. trade blacklist in 2019, when HiSilicon claimed to have a backup plan to ensure the survival of the group. Research groups Haitong and Canalys also said Huawei had been hoarding key U.S. components for nearly a year.
Today, Counterpoint’s report shows that both audit results and sell-through rate data indicate that Huawei has exhausted its inventory of mobile phone chips designed by HiSilicon. HiSilicon’s share of the global smart phone application market in the third quarter was dead, lower than the 0.4% in the second quarter, and not as good as the 3% in the second quarter of last year.
The report bluntly stated that due to the expansion of the scope of restrictions by the US government, it is impossible for Huawei to withdraw from TSMC (2330-TW), Samsung and other major wafer foundries have obtained new advanced chips.
According to Counterpoint, HiSilicon accounted for 16% of the global chipset market in the second quarter of 2020 before Washington stepped up sanctions, thanks to the adoption of HiSilicon’s advanced Kirin chips in Huawei smartphones.
A report released by research firm Gartner in April also showed that HiSilicon fell out of the list of the top 25 semiconductor suppliers in the world, which also reduced China’s share of the global chip market, highlighting the impact of US trade restrictions.
The tight supply of Kirin chips has led to continued pressure on Huawei’s smartphone business. In September, affected by U.S. sanctions, the company launched a new flagship Mate 50 series smartphone that does not support 5G.
Huawei, once the country’s largest smartphone maker, is losing market share in China’s domestic market. According to data from Canalys, the company was still not among the top five mobile phone brands in China last quarter, the top five being Vivo, Oppo, Honor, Apple (AAPL-US) and Xiaomi (01810-HK) 。
