Huawei Reportedly Increases Orders For MediaTek Chips By 300%

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Huawei seems to have settled for MediaTek chipsets for its upcoming smartphones. The Chinese phone maker has reportedly increased orders for MediaTek chips by 300 percent, according to a report. The company is seeking to circumvent the US sanctions by moving away from TSMC, its Kirin chipsets supplier.

Huawei predominantly uses its in-house Kirin chips in its smartphones, at least until now. HiSilicon, the company's fully-owned chipmaker, designs those chips, which are based on TSMC's processes.

However, the US government recently blocked foundries around the world that use American chipmaking equipment from supplying chips to Huawei. This means the Chinese company can no longer place new orders for the manufacturing of its Kirin chipsets to TSMC.

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It has reportedly reserved enough 5 nm nodes from TSMC to produce a decent number of Kirin 1020 chipsets, which are likely to fuel is Mate 40 flagships. But for its lower-cost phones as well as its next-generation high-end phones, the company needs other alternatives. MediaTek seems to be the best available option right now.

Huawei already uses the Taiwanese company's chips in some of its mid-range and budget smartphones. Going forward, expect to see MediaTek chips in high-end Huawei phones as well.

Most recently, Huawei launched the Enjoy Z 5G, its first smartphone featuring the MediaTek Dimensity 800 SoC. It is a mid-range smartphone that will go on sale in China on June 1, starting at CNY 1,699 (roughly $238).

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MediaTek evaluating resources to meet Huawei's chips demand

The recent development in the US-China war, or should we say US-Huawei war, is turning out to be beneficial for MediaTek. The Taiwanese chipmaker hasn't been doing a very good business in the last few years as it couldn't stand competitively against Qualcomm, its main rival.

However, it made a return to the flagship SoC market with its Dimensity line of 5G chips late last year.

Now, if it manages to secure huge orders from Huawei, the world's second-largest smartphone vendor, it will be a big win for the company. MediaTek is reportedly evaluating if it has sufficient resources to meet Huawei's demand.

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Huawei, meanwhile, also has one more alternative. The company could tap on Shanghai, China-based SMIC for supplying chips for its low-cost phones.

In fact, it has already started moving to SMIC for some chip production for its mid-range phones. As the latter currently only produces 14nm chips, Huawei cannot use them in its high-end phones.

The Chinese chipmaker could be a major supplier for Huawei on the longer run, though. It recently secured an investment worth $2.25 billion from China's state-backed investors, so it could catch up to the competition rather quickly.

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