Huawei Looking At A Potential Chipset Deal With Korean Companies

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Huawei has been facing tough times with the aggressive restrictions imposed by the US government. The company can no longer produce new Kirin chipsets through its Taiwanese partner TSMC. However, the company is reportedly in talks with South Korean semiconductor companies for a possible chipset deal.

While Huawei is the third largest global smartphone brand, its HiSilicon semiconductor business is the fifth largest in the world. A majority of the Huawei and Honor smartphones are powered by the HiSilicon Kirin chipset. Huawei only designs its chipsets and modems, and the actual manufacturing is done by semiconductor foundry companies.

Huawei could make a new chipset deal with Korean companies

The earlier restrictions banned the US companies from doing business with Huawei without regulatory approval. Now, the recently imposed restrictions even prevent foreign companies that use the US technology from working with the company. To stay afloat in the business, Huawei must replace the US supply chain with alternatives.

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As per the latest report, Huawei is in talks with South Korean semiconductor industry leaders for producing new chips for its smartphones. The deal will also help local Korean companies gain greater exposure in a market dominated by the US and Chinese players. Earlier rumors hinted the company has already started working with SMIC, the largest foundry in China.

Huawei might maintain close ties with the Korean companies and alternatively develop a production facility in partnership with SMIC. The Chinese government will also be boosting local semiconductor companies to keep them in the global race. Taiwan-based TSMC has been the sole supplier for Kirin mobile chipsets for a very long time.

Expect to see more MediaTek-powered Huawei smartphones

The company can procure the chipset orders from TSMC which are already in production or placed before the ban. Moreover, TSMC has to ship these orders before September 14th. Also, MediaTek has seen a 300% surge in orders from Huawei in 2020. The recently launched Huawei Enjoy Z 5G came with the MediaTek Dimensity 800 5G processor.

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Until Huawei has a chipset deal with Korean companies, more Huawei and Honor smartphones will be launched with MediaTek chipsets. With the restrictions over Huawei, OPPO is also accelerating its own chipset plan. It has already hired several engineers from MediaTek to work on its new chipset division.

While OPPO has to start from scratch, Huawei is already experienced in designing smartphone chipsets. With the new deals, it will also actively participate in the production by involving with its partners.