Huawei’s HiSilicon overtakes Qualcomm as China’s top smartphone processor supplier for first time

Yujie Xue
·4 min read

HiSilicon, Huawei Technologies’ in-house semiconductor and integrated circuit design company, has surpassed US chip giant Qualcomm in terms of smartphone processor shipments in China for the first time amid coronavirus-linked disruptions that have hit most major players, according to a report.

In the first quarter of 2020, HiSilicon shipped 22.21 million smartphone processors, according to Chinese research firm CINNO’s latest monthly report on China’s semiconductor industry. Although HiSilicon’s shipments only increased slightly from the 22.17 million units it shipped in the first quarter of last year, it was the only major company that did not see a year-on-year decline in the quarter, CINNO said in a summary of the report posted on its official WeChat account.

As a result, the Huawei subsidiary’s market share surged to 43.9 per cent, from 36.5 per cent during the same period last year, and beat Qualcomm for the first time to become China’s top smartphone processor supplier.

HiSilicon’s steady performance comes at a time when the Chinese smartphone industry is being battered by delayed product launches and dampened consumer sentiment linked to the coronavirus pandemic. Smartphone shipments in the country slumped by 34.7 per cent – more than a third – to 47.7 million units in the first quarter of 2020, according to a report released earlier this month by the China Academy of Information and Communications Technology.

CINNO’s report showed that there was a similar plunge in processor shipments, with overall smartphone processor shipments in the country dropping by 44.5 per cent in the first three months of 2020, compared to same period last year.

Huawei makes end-run around US trade ban by turning to its own chips

US-based Qualcomm, the long-time market leader, fell to second place in the latest quarter with a year-on-year decline in its market share from 37.8 per cent to 32.8 per cent. Taiwan’s Mediatek maintained its third-place position, but also saw its market share slide year-on-year from 14 per cent to 13.1 per cent.

Table showing the market share of smartphone processor supplies according to CINNO Research. Source: CINNO Research / WeChat
Table showing the market share of smartphone processor supplies according to CINNO Research. Source: CINNO Research / WeChat

Huawei, HiSilicon’s parent company, is at the centre of a high-profile US-China tech war. The Trump administration added the company to its Entity List last year, citing the risk that Huawei could give Beijing access to sensitive data from telecommunications networks. The trade blacklist effectively bars Huawei from buying US products and services.

In response, the Chinese company, which has denied the allegations, is ramping up its own capabilities to produce more American component-free network gear, including at HiSilicon.

Huawei is also reportedly shifting production of HiSilicon-designed chips away from Taiwan Semiconductor Manufacturing Co (TSMC) and towards Shanghai-based Semiconductor Manufacturing International Corp (SMIC) as Washington readies new rules which would require foreign companies using US chipmaking equipment to obtain a license before supplying chips to Huawei – a move that would directly affect TSMC.

Over 90 per cent of Huawei phones in China now use HiSilicon processors, according to CINNO. However, founder Ren Zhengfei said in an interview last year that the company would continue using chips from US vendors such as Intel and Qualcomm as long as it is still allowed by US regulators.

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