Huawei has two key lifelines in chip supply, one is the continuous supply of TSMC, and the other is the guarantee of the source of memory chips. However, Micron, the world’s third largest DRAM memory and fourth largest NAND Flash storage supplier, told DeepTech on May 29 that it had suspended supply to Huawei. According to Micron’s financial report for the first half of fiscal year 2019, Huawei accounted for 13% of its revenue share, and Micron is evaluating feasible solutions to reduce the impact on the company’s business. This is the first time Micron has responded to the Huawei incident.

At the same time, it was reported that Huawei executives frequently visited Samsung, SK Hynix, and LG. Display Wait for major suppliers of key components for memory chips and Display screens to ensure that they can continue to supply these key components, and do not join the sanctions action initiated by the United States.

The U.S. controls 20% to 30% of the memory chip market

According to the statistics of market research agency TrendForce, the top three memory suppliers and market shares in the world are Samsung 42.7%, SK Hynix 29.9%, and Micron 23%. Furthermore, the world’s top five NAND Flash suppliers are Samsung, Toshiba, Western Digital, Micron, and SK Hynix, of which Samsung has a market share of about 30% and Micron has a market share of about 15%.

From the above figures, it can be seen that Micron controls about one-fifth of the memory market. If the global share of the flash memory market is as high as 30% with Micron and Western Digital, Huawei is only the lifeblood of memory chips. Samsung, SK Hynix, because Toshiba is likely to join the embargo is not small.

Huawei purchases about 10 billion US dollars of Korean components every year, of which the supply of memory chips relies on Samsung and SK Hynix to provide DRAM and NAND Flash chips.

Industry insiders analyzed that Samsung and other major Korean manufacturers are still maintaining their supply to Huawei, and the situation should be similar to that of TSMC. Although most of Samsung’s DRAM and NAND Flash technologies are in their own hands, in terms of manufacturing, according to the U.S. Department of Commerce According to the “export control” regulations, as long as the US technology content covering hardware, software, etc. in the products sold to Huawei exceeds 25%, it will be banned, but Samsung and TSMC have not counted the machine equipment, so they can continue to supply. goods.

Machine equipment became the last “lethal weapon” under the US ban

However, TSMC’s calculation method with a technical content of less than 25% is the result of discussions with American lawyers, and it is rumored that it has not been officially approved by the US Department of Commerce. Therefore, whether there will be pressure from the US in the future, all walks of life are very focus on.

There have been rumors in the industry that TSMC continues to supply Huawei, and it has frequently been “concerned” by the United States. It can be guessed that TSMC has indeed carried a lot of pressure, especially in the entire chip supply chain. Huawei has been disconnected, from Arm, EDA, Qualcomm, Intel, Micron, Google and other software and hardware, while international standards organizations such as SD Association, WiFi Alliance, JEDEC Association are swaying.

Another thing worth noting is that after Arm suspended the transfer of technology with Huawei, it was originally hoped that the open source architecture RISC-V could become a silver lining for autonomous and controllable Chinese chips, at least on IoT chips, it could replace the impact of the lack of Arm technology architecture. , but now it seems that the situation is not so optimistic.

Because the US RISC-V industry is also included in the control list and cannot transfer technology to Huawei, as for the RISC-V ecosystem in the mainland, can domestic manufacturers adopting the RISC-V architecture continue to provide services to Huawei? It’s not clear yet.

In addition, on May 29, it was also reported that Dow Chemical, a major American photoresist and polishing liquid manufacturer, due to the regulations of the U.S. Department of Commerce, all its products are subject to U.S. export regulations and cannot sell any more products to Huawei.

As soon as the news came out, it immediately caused quite a shock, because the semiconductor production process mainly depends on machine equipment and raw materials. At present, it seems that raw materials are also listed as controlled items. As for whether the United States should include machine equipment in the scope, We are now in a “fuzzy space”, and once the United States takes a heavy hand on the most critical equipment, it may be a fatal blow.

This time, it is rumored that Dow, a major manufacturer of photoresist and polishing liquid, is no longer supplying Huawei. The products it manufactures are inevitable materials in the semiconductor process. If Dow says that it cannot sell to Huawei, TSMC will use Dow’s products. Is the continued sale of chips produced from raw materials to HiSilicon, a subsidiary of Huawei, also restricted?

The supply chain believes that the products produced by Dow Chemical are not exclusive suppliers. Other alternative manufacturers include BASF from Germany, Shin-Etsu from Japan, JSR from Japan, etc. Therefore, if TSMC cannot use Dow’s raw materials, use alternative suppliers to help. HiSilicon production is still feasible.

Since Dow is not a direct supplier of HiSilicon, HiSilicon is only an IC design company and does not need to purchase raw materials in this area, but TSMC, which helps HiSilicon OEM, needs it. Therefore, Dow’s statement of “drawing a line” After it was made public, outside speculation implied a sense of putting the blame on TSMC, or indirectly putting pressure on TSMC.

However, the industry also analyzed that Dow’s raw materials are mainly used in semiconductor manufacturing processes, but in fact, Dow’s products are also required for some assembly materials. Therefore, Dow should directly supply Huawei. This declaration is mainly about Clarifying the business part of supplying Huawei is not as speculated by the outside world.

The industry even joked that in order to express “loyalty”, every major American equipment manufacturer could make a declaration embargoing Huawei and HiSilicon, but in fact Huawei and HiSilicon could not be customers of the equipment factory at all. Will be “guided” to force TSMC to “state”.

Although these statements are all jokes, they also show the importance of TSMC’s position in the process of the United States’ pursuit of Huawei all the way. The pressure will continue to increase, but as long as TSMC continues to ship, at least Huawei will not have the problem of shutting down its operations in the short term.

Another important trend is that many large telecom operators in the world have announced to stop selling Huawei products, including the pre-order activities of Huawei’s first 5G mobile phone. Respond urgently.

The supply chain pointed out that Huawei has begun to “beautify” the chip supply chain, and HiSilicon is responsible for the products that can be supplied by HiSilicon. Pull as much inventory as you can, and try to hoard the chips needed before the end of the year to prevent the crisis of chain breakage.

Since American suppliers such as Qualcomm, Broadcom, and Intel can no longer ship to Huawei, many IC design orders have been transferred to Taiwan chip suppliers such as MediaTek, Realtek, Novatek, and Sitronix to replace American chip suppliers.

However, in the long run, it is difficult for Huawei to completely replace all US-based chip suppliers, because many key chips are still exclusively owned by US-based suppliers.

The overseas market of Huawei mobile phones may be divided by Samsung

Huawei grabbed 19% of the global smartphone market in the first quarter of 2019, setting a record high, surpassing Apple to become the world’s second largest smartphone brand factory, second only to Samsung, and the industry believed that until the end of 2019, Huawei Can maintain the world’s second throne.

However, after the US ban, Huawei’s overseas sales will inevitably be affected. In addition, if Google’s applications and services cannot be used in smartphones in the future, the acceptance of overseas consumers is not optimistic. The company’s internal goal is to increase its domestic market share as soon as possible. , make up for the loss reduced overseas.

The industry believes that the overseas mobile phone market share lost by Huawei is most likely to be taken away by Samsung, followed by domestic mobile phone brands such as Xiaomi, OPPO, and Vivo.

In addition, Apple may also get some market share, but if the domestic sales of Apple iPhones are banned, or Apple’s tariffs are raised, it will also be another storm under the friction between China and the United States, and Samsung will be no compromise. the big winner.

Huawei’s smartphone sales in 2018 were 205 million units. Due to the strong growth performance in the first quarter of 2019, the market research agency raised its mobile phone shipments for 2019 to 240 million to 260 million units. As the situation worsens, Huawei’s mobile phone shipments in 2019 have been reduced by the market to 165 million units, with Europe and Latin America having the greatest impact.

It can be seen from this that after the US sanctions against Huawei this time have hit Huawei, the biggest beneficiary is Samsung, and Samsung has benefited from both the upstream chip side and the downstream system side.

Samsung will not only take over Huawei’s overseas smartphone market share, making the system more competitive. On the upstream chip side, Huawei has no supply of DRAM and NAND Flash chips from Micron and Western Digital, and can only rely heavily on it. Samsung, this is a very dangerous thing.

Because the manufacturers who have cooperated with Samsung know that Samsung’s business model is controlled from upstream to downstream. Once there is a conflict with their own business interests, they will disconnect the partner without any scruples, and there will be no friendship. There are also very few companies that can cooperate with Samsung for a long time.

After the sanctions imposed by the U.S. Department of Commerce, none of the U.S. suppliers dared to continue to deal with Huawei. Just as Micron said, 13% of the company’s revenue comes from Huawei’s contribution. The industry believes that Micron’s revenue from the Chinese market is as high as 50%. %, but after this wave of strong winds and waves, the trend of “de-beautification” may be difficult to resist. It just depends on the progress of domestic chip technology and when it can be made up.

The continuous development of Sino-US friction is the confrontation between the two major economies in the world. The consumption power of the people and the global economic prosperity have been affected. Zhang Zhongmou, the founder of TSMC, also said a few days ago that the US restrictions on Huawei will hinder China, the United States, and even the It is the progress of technological innovation in the world.

For U.S.-based suppliers, due to regulatory restrictions, U.S. companies have to comply, but the situation continues to deteriorate. Even foreign companies are very worried that they will gradually lose China’s huge market business, which will be of no use to the company’s long-term development. Not a loss.

In this unpredictable war, no one is the absolute winner.