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The Kirin chip is gone, is it necessary for HiSilicon to exist?

Author: Gong Jinhui

For well-known reasons, HiSilicon, a semiconductor company owned by Huawei, was hit hard. According to the latest report from Strategy Analytics, the global smartphone processor market in Q1 this year increased by 21% year-on-year to US$6.8 billion, but HiSilicon’s performance was not satisfactory, and its smartphone processor shipments plummeted by 88% year-on-year.

In fact, as early as August last year, the United States launched the third round of sanctions against Huawei chips, making Kirin high-end chips a swan song, and pessimism from the outside world continued to spread. Some people can’t help but sweat for the prospect of HiSilicon, saying that it was born for the chip, and the Kirin chip is gone, is there still a need for HiSilicon to exist?

At that time, the news of the departure of HiSilicon personnel came one after another, which seemed to indicate that Kirin would no longer be available and HiSilicon would be disbanded. In fact, this kind of worry is unnecessary. Regarding the positioning of HiSilicon in Huawei’s future system, as early as May 2019, Huawei founder Ren Zhengfei gave his own answer.

“HiSilicon is a support team of Huawei. It follows Huawei’s main battle team, just like the refueling truck, bridge erection machine, and stretcher team in the tank team. It is such a positioning.” The implication is that if there is no HiSilicon , Huawei’s future road will be difficult to take. It is not difficult to see that the mission of HiSilicon will be even more arduous in the future.

Not long after, Ren Zhengfei talked about HiSilicon again in an exclusive interview with CCTV. When the host mentioned that “His is almost like a hero in everyone’s mind”, he immediately echoed that they were heroes, but they were just unknown. Although unknown, they have won many medals, high ranks, and a lot of income. As the joke goes, as long as there is “a lot of money”, that’s fine.

Recently, Chen Lifang, a director of Huawei, rarely disclosed the latest status of HiSilicon. She revealed that HiSilicon will have more than 7,000 employees in 2020, so maintaining this part will be a serious financial burden for Huawei. However, Chen Lifang emphasized that Huawei is privately held and is not affected by external forces, and its management has made it clear that HiSilicon will be retained.

In other words, Huawei continues to develop world-leading semiconductor components internally, and the HiSilicon department will not make any decision to restructure or lay off staff. Chen Lifang said that despite the sanctions, even if TSMC is unable to produce, Huawei HiSilicon will continue to develop semiconductors, which is expected to continue for two to three years, and Huawei can cope with it.

She believes that other countries are working hard to upgrade their own semiconductor industries, which will help HiSilicon to acquire new supply chain partners that do not rely on U.S. technology. Chen Lifang predicts that this situation (Huawei chips will see the light of day again) will be seen in a few years.

In my opinion, the pain of broken core in 2020 has plunged HiSilicon into a dark moment, revealing that it is good at chip research and development, but chip manufacturing is a major weakness. Without TSMC’s foundry, SMIC’s technology cannot meet the requirements of HiSilicon Kirin chips and cannot enter the production line. HiSilicon high-end chips can only stay on the drawings. The developed chips cannot be produced, and the future of HiSilicon has become the focus of attention.

For Huawei, HiSilicon plays a key role in occupying the strategic highland of technology, and no matter how difficult it is, it cannot be easily given up. Although the United States continued to suppress it and made it experience the deepest suffering since its establishment, among Ren Zhengfei’s options, “we have nowhere to go except victory.”

Huawei’s rotating chairman Xu Zhijun also bluntly stated that Huawei has no profit appeal to HiSilicon, and supports the HiSilicon team to continue chip research and development to prepare for the future. “As long as Huawei can afford it, it will continue to support the HiSilicon chip team.”

Today, the mission on HiSilicon’s shoulders is even more arduous and greater. It not only shoulders the future life and death of Huawei’s terminals, but also represents the breakthrough force of China’s chip manufacturing. Get up from where you fall, and break away wherever someone gets stuck. It is imperative for Huawei to build its own chip research and development software and chip manufacturing equipment, break through basic innovation, and win the next era.

At the juncture of life and death when the core components were stuck in the neck, Huawei led by Ren Zhengfei remained firm in its direction and became a banner of Chinese technology companies with the courage to “root down and pierce the sky upward”. Come on Huawei! Come on HiSilicon!