Rumour Huawei might exit smartphone market next year

Taiwan’s Huawei mobile phone component supplier received a notice last week, stating that Huawei’s new product developement case was temporarily suspended due to MediaTek chip supply problems.

According to the “Free Times” report, market participants believe that if the chip source problem cannot be resolved, Huawei may really face a crisis of exiting the mobile phone market next year.

According to IDC’s July data, in the second quarter of this year, Huawei grabbed the first place in the market with 55.8 million units shipped and 20% market share, winning Samsung’s 54.2 million. Taiwan’s shipments and a market share of 19.5%, Huawei’s global shipments of mobile phones reached 105 million units in the first half of the year.

The US government issued new export regulations on May 15, requiring manufacturers to use US-made equipment or chips designed in accordance with US software and technology to supply Huawei, and they must first obtain a US license. TSMC Chairman Liu Deyin has publicly stated that TSMC will no longer ship Huawei after September 14.

Faced with the US blockade of technology output and TSMC’s outage of chips, Huawei sought alternative measures. These include the round-trip purchase of TSMC chips through MediaTek and Samsung for use in 5G mobile phones. Starting in June, Huawei has expanded its purchases of MediaTek, and the number is rumored to be three times that of the past.

In order to completely cut off Huawei’s future, the United States announced on August 17 that it would strengthen its ban on Huawei, prohibiting Huawei from obtaining chips developed and manufactured with US technology through third-party operators, breaking its circumvention of restrictions, and reselling from suppliers outside the United States.

Huawei’s mobile phone chip sources were all cut off, the current inventory can be used until early next year. Thus, if this continues and there is no resolution to it, Huawei might really have to exit the smartphone market.