When US hardware and software companies started severing ties with Huawei this week, I figured that would be tough on the Chinese company’s smartphone division, but it wouldn’t necessarily be the end of the world.
After all, Huawei is one of only a handful of phone makers that designs its own chips. So even if Qualcomm, Intel, and other chip makers were to pull the plug, Huawei could continue producing phones with its own Kirin chips.
Except those chips are based on ARM architecture… and now the BBC reports that ARM Holdings is also suspending work with Huawei. That could be a big problem for Huawei.
According to the BBC, while ARM is based in the UK, officials at the company have told employees that its chip designs include technology that originated in the United States… which means it’s subject to the trade restrictions put in place by the Trump administration.
Huawei has been half-expecting this sort of move for years, and has been developing its own smartphone operating system that it could use in lieu of Android. The company could be ready to start rolling it out as soon as this fall, if necessary.
Meanwhile, Huawei has been trying to attract app developers to its own app store, and the company is said to be looking at a possible partnership with third-party Android app store Aptoide as well.
So from a software standpoint, it’s theoretically possible that Huawei could survive without support from Google. While conventional wisdom is that there’s not room in the market for a mobile operating system other than Android and iOS, Huawei may be big enough and have enough going for it to pull off the launch of a new OS where others have failed. Huawei is currently one of the top three smartphone makers in terms of shipment volume, and the company’s latest phones have received stellar reviews for innovative camera features like high-quality low-light shots and advanced optical zoom photography.
But… if the company loses the right to license ARM designs for its Kirin processors, that could make it difficult to produce next-gen chips. Sure, Huawei could theoretically try to switch to an alternate architecture such as MIPS or RISC-V, but it would probably take years for the company to produce something as good as its current-gen Kirin processors.
Maybe Huawei could try buying chips from Chinese companies like MediaTek… but for the most part those are also based on ARM designs and could be subject to similar restrictions if those companies try to sell products to Huawei.
All of which is to say, it’s really unclear where Huawei goes from here.
Huawei’s problem is bigger than disconnection from a few large suppliers in the market. What the U.S. wants is that everybody who is doing business with U.S. companies may not do business with Huawei. It might seem a bit far fetched, but the U.S. may use a variety of incentives to nudge businesses in that direction. Huawei might not have any external suppliers that can afford to ignore U.S. sanctions. We will see how this plays out.
In the most extreme outcome every firm in the market has essentially two choices: do business with U.S. companies or with Huawei and other Chinese firms. This would essentially force Huawei to disconnect itself from majority of big players and use intermediary companies between itself and any necessary partners. This type of arrangement with buyers in Iran got Meng Wanzhou arrested, so it’s certainly not failproof.
US companies like Cadence, Synopsys and Mentor also supply software, firmware, IP blocks and hardware (emulation and FPGA prototyping) for chip makers. From what I’ve heard Huawei is a big customer for Cadence. If these US companies stop working with Huawei, then Huawei may not be able to make chips at all no matter the target market region of the final product.
So it’s not even a matter of ARM vs. RISC-V. They won’t be able to simulate, test, compile, etc. anything. They’ll just have the RISC-V Verilog source code just sitting on a server doing nothing.
Of course, there’re also peripheral IP blocks where much of which are sourced from the above 3 US companies.
I think it’s pretty much over for them in the west. If what’s been thrown at them so far has not done it, they will just continue pulling things until they are stopped in the west. They have already been banned in countries. Now banned from being on 5G in europe by some major carriers, dropped by Qualcomm, Google and ARM. It’s pretty much over. And as I say, if they work around those major roadblocks, they will just put more in front of them.
Eventually some deal whether it be part of the trade war or otherwise will need to be made
They are looking pretty healthy in Europe. We know there is nothing wrong with their products and the networks want to use it because it is cheaper. A few carriers have pulled their phones but given how many people now buy their phones outright that isn’t really an issue.
You are also assuming this element of the trade war lasts more than a few weeks.
MIPS is US based and would have the same restrictions. RISC-V may be their only option. I doubt this will last long though.
MIPS recently went open source, so it might be ok for Huawei to use despite the ban:
MIPS and or RISC V are as good as any other architecture. And SoCs can be better than ARM in very few months.
GPUs are the problem, there are no open source or good Chinese GPUs and the Vulkan compatible open source one would need a lot of work.
Corea did an Import substitution strategy that went well, now China is not only in a better initial position, it is also the owner of most of the rare materials needed for making electronics,
Only making laws that would forbid raw export, and or that any product using Chinese materials must be produced in China and be able to be sold to any other Chinese – or WTO compliant (not USA now) country – corporation would change the course of this commerce war.
I mean technically they could develop using the open-source RISC design, use the open-source AndroidOS, and use a mixed Huawei-China for App Services. They could even silently acquire ImaginationTechnologies and develop open-source Vulkan Mobile GPU’s.
There’s a lot of “if”s there, and I’m not sure it’s worth pursuing for Huawei. It certainly is worth pursuing for China’s independence though.
I think either Huawei will be relegated to being dodgey, and selling to only China (and surrounding nations) like the early days of Xiaomi. Or, Huawei will be back in business after a year or two, after heavy fines and restructuring to appease USA’s set conditions.
Remember, it’s easy to BUILD a Tesla Model 3, it is difficult to DESIGN a Tesla Model 3. Same principle applies here.
Imagination Technologies doesn’t have any R&D in the USA so they don’t have any problem selling their products to Huawei. In fact, Imagination Tech is actually optimistic about the current situation:
“Some companies are even openly optimistic. “As a U.K. headquartered global organisation, with no research and development in the USA, we’re in a unique position to work with companies around the world,” said Woz Ahmed, executive vice president of corporate development at Imagination Technologies.”
Yes, but it means Huawei is in a bad situation.
Acquiring/buying ImaginationTechnologies would be much wiser than licensing from them, when they could stop the contract for a number of reasons. And the other reason, is that Samsung was rumoured to be thinking of acquiring them for their PowerVR department, which would’ve helped Samsung’s fab division in making Exynos SoC’s using entirely custom chips to compete better, rather than stock/off-shelf ARM designs.
That’s why I suggested it.
But I have no idea how Huawei’s division is actually doing, but it looks like Huawei (phone) was actually losing a lot of money, whereas Honor (phone) was making decent money… suggesting that they’re not successful in the high-end, but in the low-end, and most of their revenue is generated by their other division and some cash injection from unknown (PRoC ?) sources.
So maybe saving Huawei’s (high-end) phone’s division is not in the best financial interest of the company? Only they would know.
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