Chipmakers Qualcomm, MediaTek gain as Huawei HiSilicon struggles

Qualcomm led the smartphone processor market with a 40% revenue share in Q1 this year   | Photo Credit: Reuters

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Qualcomm and MediaTek have capitalised on HiSilicon’s challenges and gained market share in the smartphone processor market, as Huawei's semiconductor arm suffers a steep decline in shipments.

Qualcomm led the smartphone processor market with a 40% revenue share, followed by MediaTek with 26% and Apple with 20% in Q1 this year, according to research firm, Strategy Analytics.

The research firm had said earlier that HiSilicon may lose its primary customers like Honor to Qualcomm and MediaTek in future.

It also noted that Qualcomm and Mediatek have a strong presence in Xiaomi, Oppo and Vivo due to strong 5G demand and the smartphone market recovery.

On the probability of China retaliating to US sanctions, the research firm reckons that Qualcomm's major role in China’s 5G deployment makes it unlikely for China to retaliate with sanctions on Qualcomm and other US chip makers. This further boosts the leading chip makers' position in the smartphone processor market.

HiSilicon is the only major smartphone processor vendor to see a decline in shipments. Its smartphone processor shipments declined 88% in Q1 this year after a spectacular growth between 2012 and 2020.

"HiSilicon’s shipments will decrease to zero at some point this year," said Sravan Kundojjala, Associate director, Strategy Analytics.

The company is hit by trade restrictions on its business, its primary customer Huawei and its manufacturing partners.

HiSilicon's supply chain partner, TSMC has stopped manufacturing chips for HiSilicon after US sanctions on the world's largest contract chip maker. In anticipation of this, HiSilicon stockpiled inventory.

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A lack of continued support means the company would soon run out of its stock, Sravan said.

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Printable version | Jul 26, 2021 11:16:11 PM |

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