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This post was edited by markwu at 2019-12-3 07:22|
Huawei Makes Smartphones Without American Chips
For China’s top smartphone maker, U.S. suppliers are increasingly a nice-to-have, not a must-have.
WSJ: December 1 2019; excerpts
American tech companies are getting the go-ahead to resume business with Chinese smartphone giant Huawei Technologies Co., but it may be too late: It is now building smartphones without U.S. chips. Huawei’s latest phone, which it unveiled in September—the Mate 30 with a curved display and wide-angle cameras that competes with Apple Inc.’s iPhone 11 - contained no U.S. parts, according to an analysis by UBS and Fomalhaut Techno Solutions, a Japanese technology lab that took the device apart to inspect its insides.
In May, the Trump administration banned U.S. shipments to Huawei as trade tensions with Beijing escalated. That move stopped companies like Qualcomm Inc. and Intel Corp. from exporting chips to the company, though some shipments of parts resumed over the summer after companies determined they weren’t affected by the ban.
Commerce Secretary Wilbur Ross, whose department oversees export licenses, last month said U.S.-based chip makers were being granted licenses to resume some other deliveries. The department has received nearly 300 license applications, he said.
Meanwhile, Huawei has made significant strides in shedding its dependence on parts from U.S. companies. (At issue are chips from U.S.-based companies, not those necessarily made in America; many U.S. chip companies make their semiconductors abroad.)
Huawei long relied on suppliers like Qorvo Inc., the North Carolina maker of chips that are used to connect smartphones with cell towers, and Skyworks Solutions Inc.,a Woburn, Mass.-based company that makes similar chips. It also used parts from Broadcom Inc., the San Jose-based maker of Bluetooth and Wi-Fi chips, and Cirrus Logic Inc.,an Austin, Texas-based company that makes chips for producing sound.
Kicking The Habit
Since Washington restricted U.S. technology in Huawei's smartphones, the Chinese telecom giant added non-U.S. suppliers and replaced some American components with ones from other places.
While Huawei hasn’t stopped using American chips entirely, it has reduced its reliance on U.S. suppliers or eliminated U.S. chips in phones launched since May, including the company’s Y9 Prime and Mate smartphones, according to Fomalhaut’s teardown analysis. Similar inspections by iFixit and Tech Insights Inc., two other firms that take apart phones to inspect components, have come to similar conclusions.
With the Mate 30, audio chips supplied in older versions came from Cirrus Logic. In the newer Mate 30 models, chips were provided by NXP Semiconductors NV, a Dutch chip maker, according to Fomalhaut. Power amplifiers provided by Qorvo or Skyworks were replaced with chips from HiSilicon, Huawei’s in-house chip design firm, the teardown analysis showed.
“When Huawei came out with this high-end phone - and this is its flagship - with no U.S. content, that made a pretty big statement,” said Christopher Rolland, a semiconductor analyst at Susquehanna International Group. He said that in recent meetings, Huawei executives told him that the company was moving away from American parts, but it was still surprising how quickly it happened. ..............
............ Several U.S. chip makers, like Qorvo, Skyworks, and Broadcom, this year warned of earnings hits because of the partial U.S. export ban.
Huawei’s drive to shake off its dependence on U.S. parts goes beyond smartphones. John Suffolk, the company’s top cybersecurity official, said in an interview that the company is now capable of producing—without U.S. components—the 5G base stations that are a key part of the infrastructure needed for the high-speed network.
“All of our 5G is now America-free,” Mr. Suffolk said. “We would like to continue using American components,” he said. “It’s good for American industry. It’s good for Huawei. That has been taken out of our hands.”................
“Independence of U.S. supply indicates that the strategies of the U.S. in trying to isolate Huawei are not working,” said Handel Jones, president of consulting firm International Business Strategies Inc......................