Huawei's semiconductor subsidiary HiSilicon views Qualcomm as its "number one competitor," The Information reported Tuesday, citing an unnamed company official. HiSilicon produces chips for Huawei's smartphones and tablets, as well as products from the company's secondary mobile brand Honor, with recent reports suggesting its manufacturing output is now planned to be increased in a significant manner as Huawei wants to decrease its reliance on external silicon suppliers, primarily Qualcomm. Qualcomm's China Tech Day event held in Beijing three months back indirectly illustrated the growing rivalry between the duo, with Huawei being the only relevant name from the local tech industry that didn't send any representatives to attend the conference.
Huawei was also the only major original equipment manufacturer from the Far Eastern country that didn't speak out against Broadcom's attempted hostile takeover of the San Diego-based chipmaker earlier this year. According to one of the U.S. Treasury Department's national security panels, such a consolidation would have indirectly benefitted Huawei and provided it with an opportunity to seize a lead in the 5G race and a number of other technological fields, most likely because Broadcom would cut Qualcomm's research and development budget in order to accelerate its expected investment return as it often did with its past acquisitions. The Shenzhen-based company is still using Qualcomm's chips in some of its devices but has been decreasing its spending on the firm's equipment over the course of the last seven years, so despite the fact that it isn't offering HiSilicon-made chips to third parties, Qualcomm views it as a rival due to its consistently growing share of the global smartphone market. Today, Huawei is the third largest handset vendor by shipments and sales, according to numerous industry trackers.
Last year, HiSilicon generated approximately a quarter of Qualcomm's $22.3 billion annual revenue and is expected to continue growing moving forward. With more than two-thirds of Huawei and Honor-branded handsets released this year being expected to feature HiSilicon-made chips, Qualcomm is witnessing a major opportunity loss for its business. The duo is now also competing in the intellectual property space, particularly in regards to Internet of Things and 5G patents. Huawei's recent partnerships indirectly benefitted HiSilicon even when the company wasn't using its proprietary chips. The Nexus 6P project that resulted in a smartphone designed by both Huawei and Google allowed HiSilicon's engineers to learn a great deal about chipset-focused software optimization even though the smartphone in question ended up shipping with Qualcomm's Snapdragon 810, sources close to the Chinese company claim.