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With the lack of cores, the Mate series is broken, can Huawei turn around?

It was first revealed that Huawei would sell Honor’s self-media “LatePost”. In the past two days, an exclusive news was released saying that Huawei will not release new Mate series flagship mobile phones this year.

This means that Huawei’s original P series and Mate series dual-core high-end phones have been released year by year, and the mobile phone chip inventory that Huawei has accumulated since the supply was cut off by the United States is about to be exhausted.

Although it is not explosive news that the Mate series will not release new products, after all, based on Huawei’s current situation, we can guess that such a day will come. But what is more worrying at present is how much impact Huawei’s other two major revenue sources, the operator business and the enterprise business, will be in the future, in addition to the consumer business.

For example, the self-developed “Tiangang” chip currently used by Huawei’s 5G base station uses a 7nm process. This level of chip must be manufactured by TSMC. Therefore, if the inventory of base station chips is insufficient, there may also be supply problems for base station products in the future. .

Huawei’s server chip Kunpeng 920 also uses the ARM architecture of the 7nm process. Except for the base station chip, which can only be found by TSMC, the ARM company from the United Kingdom that has been sold to the Japanese (may be sold to the United States soon) is also affected by the United States. The impact of the supply interruption cannot provide Huawei with the latest services.

For Huawei, the core of almost all 2C and 2B products currently engaged in its main business are high-end chips, and the domestic industrial chain cannot achieve independent manufacturing of “de-beautification”. Therefore, after the inventory of various chips is exhausted, Huawei’s future How will the road go? Here are just some personal guesses:

1. 2C lines: rely on software optimization and 4G chips to “continue life”.

In early June, Huawei officially released the commercial version of the Hongmeng system. Wang Chenglu, the head of Hongmeng, said in an earlier interview that the ecological development of Hongmeng in the past two years is particularly important. At present, we still have hundreds of millions of Huawei mobile phone users. If the old user has a very good experience after upgrading to the Hongmeng system, he may stay. As long as these two years are taken away, our hardware may come back.

Therefore, Huawei will do its best to maintain existing Huawei mobile phone users, and do its best to optimize the operating system so that the mobile phone does not get stuck and delay the user replacement cycle.

Is it feasible? Personally think it is quite reliable. Because on the one hand, with the mobile phone chips entering the 7nm and 5nm era, the chip industry chain is on the road to the limit, the research and development speed has shown a trend of deceleration, and the performance improvement of new chip products to the previous generation products has also declined.

On the other hand, under the current version of the 5G network, the main driving factor for mobile phone replacement, it does not show a significant advantage over 4G in the 2C field.

According to data released by the China Academy of Information and Communications Technology, in May 2021, the domestic market shipped 22.968 million mobile phones, a year-on-year decrease of 32.0%, of which 16.739 million 5G mobile phones, a year-on-year increase of only 7.0% , which also confirms my above point of view.

Data source: China Academy of Information and Communications Technology

Of course, it is impossible for Huawei to produce new phones at all, so what should we do? The United States has actually left an opening for Huawei. The interruption of Huawei’s technology supply is mainly aimed at the 5G field, excluding the previous generation of communication technology 4G.

According to the pictures exposed on the Internet a few days ago, Huawei’s latest tablet product, the MatePad Pro, will use the 4G version of the Qualcomm Snapdragon 870 chip. It is believed that in the future, Huawei is likely to launch the latest Qualcomm or MediaTek chip Huawei’s “specially supplied” 4G version on mobile phone products.

Huawei launched four mobile phones on its official website in June, namely Mate40 Pro, Mate X2, Mate40E, and nova 8 Pro, all of which use Kirin chips. However, due to the interruption of 5G radio frequency supply, the four mobile phones are all pure 4G mobile phones. Huawei It has already begun to test the model of high-end 4G mobile phones.

Data source: late

It’s good to say for tablet products, but will consumers buy Huawei’s new 4G mobile phones at this node? On the one hand, it depends on the future evolution speed of 5G networks and whether there are killer applications. Loyalty to the Huawei brand. Only at the current stage, if the performance of the mobile phone is strong enough, it can indeed offset the impact of not supporting the 5G network.

2. 2B line: lack of core or forced transformation.

Whether it is 5G communication equipment or servers, the probability of Huawei obtaining a production license for self-developed chips is very low at present. Compared with the 2C market, it is more difficult for Huawei.

Especially in terms of 5G communication equipment, this is the “restricted area” in the “restricted area”.

Therefore, if Huawei wants to continue its server business, it may only use products from American companies. Moreover, the United States has actually approved Intel and AMD’s supply license to Huawei, but in this case, Huawei will become an integrator and lose its mastery of core technologies. Whether Huawei wants to do this is a question mark.

A few days ago, China Telecom and China Mobile, Huawei’s major government and enterprise customers, respectively announced their own list of winning bidders for server procurement.

Data source: C114

According to industry experts, this move may be a result of Huawei taking the initiative to withdraw from its own servers and turn to the field of rear service support.

For 5G communication equipment, especially in the field of base stations, although the number of demand is relatively stable, Huawei has also predicted the production scale in advance, but once the demand of subsequent operators increases, Huawei’s market is likely to cause no core shortage at all. ‘s colleagues.

Therefore, in the 2B field, it is imperative for Huawei to transform, and Huawei has already shown the trend of transformation. On the one hand, it is transforming to the application side, such as Huawei’s 5G 2B solution, and on the other hand, it is transforming to fields other than ICT, including the field of smart electric vehicles and energy where Huawei is deeply involved.

After all, whether it is a smart electric vehicle or a new energy source, both belong to a very large industry and many sub-sectors are not highly dependent on high-end chips, such as driverless algorithms in the field of smart electric vehicles, in-vehicle operating systems, lidar, energy In the field of photovoltaic inverters, communication power supplies, computer room power supplies, etc.

Moreover, both of these two fields belong to Chinese companies occupying a key position in the industrial chain and have sufficient say, and it is difficult for the United States to get stuck in China’s “main battlefield”, which will allow Huawei to gain stable profits in the future without worrying about it.

3. The key is to “de-beautify” the construction of the chip industry chain.

Of course, the above are all temporary solutions, not the root cause. If Huawei, the absolute king of the ICT field, wants to go on in the long run, it must finally be able to truly master the source of controllable chips.

However, it is useless to rely on Huawei to achieve this goal. Huawei’s strength in the chip industry chain is upstream chip design. In the first half of 2020 before the supply cut, HiSilicon was the tenth largest semiconductor company in the world, second only to Texas Instruments in terms of revenue. And if there is no such mess of cutting off the supply, HiSilicon is likely to continue to climb on the list.

If you really want Huawei HiSilicon to manufacture its own chips without the control of the United States, you need to build a full line of “de-beautification” production lines such as EDA software, materials, equipment, manufacturing, and packaging.

If you want to realize the complete autonomy of high-end chips in the short term, it is a fool’s dream. However, it may not take long for my country’s industrial chain enterprises to work together to achieve the “de-beautification” manufacturing of 28nm chips. Among them, the core equipment lithography machine, according to foreign media According to reports, it is planned to be produced from Shanghai Microelectronics (SMEE) by the end of this year, and it is also expected that in 2023, Shanghai Microelectronics 20nm lithography technology will be first deployed for the manufacture of 5G equipment chips.

28nm is not as advanced as 7nm and 5nm, but in fact, most of the current chip manufacturing processes are above 28nm, including IoT chips, automotive chips, router chips, camera chips, etc. In 20 years, the share of chips above 28nm is still more than 60% . Therefore, once the 28nm chip manufacturing is nationalized, HiSilicon can continue to operate.

Chen Lifang, a director of Huawei, said that Huawei’s management has made it clear that HiSilicon will retain HiSilicon, and the HiSilicon department will not make any decision to reorganize or lay off employees.

Recently, while the overall A-share market has been sluggish, chip stocks have been on a tear, and companies in various sectors have ushered in skyrocketing growth, which also shows the capital market’s expectations for localization and promotion at the national level.

Perhaps, as long as Huawei waits a little longer, it may really usher in a turnaround.

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