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Huawei sourcing mobile chips from MediaTek and UNISOC to beat U.S trade ban

By Cookie Monster - on 23 May 2020, 10:17am

Huawei sourcing mobile chips from MediaTek and UNISOC to beat U.S trade ban

Huawei has approached two Asian chip suppliers to keep its smartphone business alive after TSMC stopped taking new orders and the U.S blocked its access to chip manufacturers who use U.S software and technology.

Sources familiar with the matter told Nikkei Asian Review that Huawei is in talks with MediaTek and UNISOC to buy more mobile chips. MediaTek is the world's second biggest mobile chip developer after Qualcomm, and UNISOC is the second biggest mobile chip designer in China. 

As MediaTek is already supplying chipsets for Huawei's mid to entry-level 4G phones, Huawei is hoping to secure orders for the higher-end 5G mobile chips to power its flagship phones. The chip maker is also assessing whether it has enough human resources to support; Huawei is apparently requesting for volume 300% above the usual procurement in the past few years.

"Huawei has foreseen this day coming. It started to allocate more mid- to low-end mobile chip projects to MediaTek last year amid its de-Americanization efforts," one of the sources said. "Huawei has also become one of the key clients for the Taiwanese mobile chip developer's mid-end 5G mobile chip for this year."

Huawei is looking to strengthen its collaboration with Beijing-backed mobile chip developer UNISOC. UNISOC previously supplied a small number of chipsets for Huawei's entry-level phones and tablets. The mobile chip developer is said to have accelerated its 5G chip development last year to catch up with Qualcomm and MediaTek.

For now, Huawei is believed to have enough inventories of chipsets to last till the end of the year. If it has to switch to chipsets from MediaTek and UNISOC, it would be hard for Huawei to differentiate its high-end flagship phones from the likes of Oppo and Xiaomi which use similiar chipsets.

Source: Nikkei Asian Review