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Can Huawei survive if it has to abandon Kirin

09 August 2020, Sunday By Elena Arich
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US trade sanctions against the Chinese giant now apply to foreign chip manufacturers. We can say that not to everyone, but only to those who use or license American technologies, but in reality, this is almost all. As a result, this does not allow TSMC or Samsung to produce chips for Huawei. Kirin is gone without a manufacturing partner. As simple as that. But will it just be a company that is faced with this?


Where Kirin processors are used


In addition to the company's smartphones, this will have a serious impact on its routers, switches, and other equipment that uses Kirin chips. Then there is only an endless weighing of options, pros, and cons of different systems, and offers from other manufacturers. In addition, you will have to adjust to the proposals and restrictions of the manufacturers themselves.


Huawei may turn to China's own Semiconductor Manufacturing International Corporation (SMIC) to manufacture Kirin. However, even SMIC uses American-made equipment, so even in the short term, this will still cause problems with Washington. In addition, SMIC is noticeably behind in advanced chip manufacturing technologies. Not only it will not be able to provide the company with 5-nm chips, it has not even reached 7-nm and 10-nm. Its level is 14 nanometers. This option is not suitable for premium smartphones at all.


Alternatively, Huawei is still allowed to purchase chips from competing developers if they are not located in the US. This already excludes Qualcomm from the scheme. Samsung has no track record of selling large quantities of Exynos chips to third parties. Remains MediaTek. 


Huawei smartphones on MediaTek


Huawei has already started using MediaTek chips for some of its more affordable phones. Meanwhile, industry insiders suggest that Huawei's purchases from MediaTek will grow by up to 300% this year in light of the current situation. There is even talk of ordering 120 million chips in an attempt to close the deficit. It remains to be seen whether Huawei will consider MediaTek's Dimensity 1000 series a suitable replacement for premium models, but the company may not have much choice if it wants to maintain sales momentum.


Premium models cannot do without a truly top-end processor

Even if this option works, the company loses the most important thing. Future Huawei phones are at risk of losing almost everything that makes them special. They will lose the zest and the powerful tool that allowed the company to be flexible. This is much worse than losing access to Google Play. The company pulled up its app store, but in China, it was not important, and problems with iron can occur in all markets.


What Huawei will lose without Kirin


As a result, the company will lose the unique miniature 5g chip built into Kirin 990 and newer versions. And it will not be able to use the artificial intelligence module adapted specifically for it and the gaming capabilities of its devices so powerfully.


Kirin is also at the forefront of machine learning with its custom Da Vinci architecture. It enables ultra-high resolution zoom images, low power voice recognition, gesture control, security face recognition, and more. Well, again, 5G. Now another company will decide what the chip will be, and Huawei smartphones will simply become "universal stamping".


Quite simply, the situation can be compared to the fact that a person always sewed suits for himself and looked great. Now he will buy ready-made. They will also be comfortable and fit well, but that is still not the case. Without Kirin, Huawei will no longer be itself.


Without Kirin, there is no doubt that Huawei's ability to adapt and withstand the pressures of the US trade embargo will be further diminished. Kirin penetrates directly into the backbone of Huawei's smartphone business, and its future seems to be now firmly in the hands of who and how the company can negotiate. 


Huawei has to face more and more challenges

With no sign of a full-fledged TSMC replacement on the horizon, Huawei may have to find a new close partner in MediaTek. With all due respect to this company, the release of new 5G models for the premium segment is not their strong point. Budget models are suitable for using them, but definitely not the Huawei P50 Pro or Honor 40 Pro.


Not only will this affect the performance of devices and their optimization, but it will also affect the cost of smartphones. It is much cheaper to produce large batches of your own processor than to buy someone else's development. As a result, smartphones will become not only worse but also more expensive. 


Huawei's Future


Having just displaced Samsung from the leading position in the mobile industry, Huawei still has a small margin of safety that will not allow the company to fall to the bottom immediately. However, the company needs to do something to turn the situation around.


It will be a pity to lose such smartphones

We can say that if the situation turns out to be temporary, the company will then start producing its chips again and everything will fall into place, but this is not the case. Having stopped developing its chips, Huawei will lag behind other manufacturers and will not be able to catch up with them.


Do you believe in Huawei without Kirin? Will its smartphones be able to work normally on chips from other manufacturers? Do you have something to say about this in our Telegram chat?

Just making them "just in case" is also a bad option, since it is a huge investment. Even Huawei will not be able to spend that kind of money without prospects. Not only do the money invested in development have to be repaid, but the developments will not be full-fledged unless they are released outside the laboratories in the form of hundreds of millions of smartphones.


Summing up, we can say that it is not yet clear what other sanctions will be imposed on Huawei, but the current restriction is much more terrible than the ban on working with Google. Even allowing the use of ready-made chips from other companies does not save the situation. The company needs its own processor, which made it one of the industry leaders. It's not just gigahertz under the lid. Without it, everything else can fall down: the camera, artificial intelligence, charging, and so on.

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