Huawei phone

Huawei phone prices skyrocket as chip supply gears up

The escalating technology trade war between the United States and China has seen prices for Huawei smartphones rise in China, as fears grow over continued access to its Kirin chips.

Prices for new and used Huawei smartphones in the Huaqiangbei electronics market in Shenzhen have risen from 400 to 500 yuan ($ 59 to $ 74) in just over a month.

Rampant inflation: As Huawei worries about chip access, handset prices are skyrocketing.

And Huawei’s high-end Mate 30 was selling for 14,000 yuan ($ 2,067), up from 10,000 yuan ($ 1,477) in January.

The threat to Huawei’s chip supply began in May when the United States announced it would tighten its export controls.

The U.S. Department of Commerce said any chipmaker using U.S. equipment, intellectual property, or design software should apply for a license before shipping chips to Huawei.

Peel the chipsWhere it gets interesting is that the Kirin chips that Huawei relies on are actually not made in the United States, but by the Taiwan Semiconductor Manufacturing Company (TSMC), located in Taiwan’s Hsinchu Science Park.

The U.S. regulations, which came into effect on September 15, target any chipmaker anywhere in the world that uses U.S. equipment, intellectual property, or software, saying they need a license to supply Huawei.

It was clearly written with TSMC in mind. This will hurt the Taiwanese chipmaker as well as the consumer electronics maker in Shenzhen.

Huawei represents between 15 and 20% of TSMC’s annual turnover and is its second customer after Apple.

TMSC is the world’s most valued semiconductor company, with a market capitalization of $ 408 billion.

Other chipmakers that supply Huawei are also warning the market for memory chips, such as those made by Kioxia Holdings Corp (formerly Toshiba Memory), could quickly run into surplus, with prices plummeting.

Huawei, like Apple and Samsung, designs its own chipsets, but outsources their manufacture.

And its Kirin chips are based on an advanced technique known as the 7-nanometer process. The cutting edge moves to the next standard, a 5 nanometer technique.

China’s largest chipmaker, Shanghai-based Semiconductor Manufacturing International Corp (SMIC), cannot yet use 7-nanometer techniques on a large scale.

It also uses American material.

Ohé crispsQualcomm would very much like to apply for a license from the US government to sell to Huawei.

And in its favor, it is an American company, based in San Diego.

Its success largely depends on the outcome of the US presidential election in November.

Want to learn more about 5G? Check out our dedicated 5G content channel here on Light Reading.

With Trump’s strongly anti-Chinese stance, Democratic candidate Joe Biden could try to gain support from US tech companies, who would benefit from selling to Huawei.

While the stakes are high for Qualcomm, they are huge for Huawei.

Huawei became the world’s largest smartphone supplier in July, selling 55.8 million devices in the second quarter, compared to 53.7 million for second-largest Samsung.

Even then, however, its overseas sales were declining rapidly, dropping 27% from April to June compared to the same period in 2019.

Huawei’s small Chinese competitors, such as Xiaomi and Oppo, are seeing their European sales soar.

A big problem for Huawei is that its newer devices cannot use Google services.

“Due to government restrictions, Google apps and services are not available for preloading or sideloading on new Huawei devices,” says Google.

It’s less of a problem in the Chinese domestic market, where Google services are stuck anyway, but it’s a big deal for overseas markets.

There are 1.5 billion active Gmail users. Google Chrome controls around 64% of the browser market, with its mobile app downloaded more than 5 billion times.

Outside of China, Google represents a significant share of the app market. And without apps, smartphones aren’t very smart.

All the more reason to be concerned if you are Huawei, or one of its many suppliers.

If you’re a competitor, however, you might just freeze the champagne.

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Pdraig Belton, special editor contributor to, Light Reading

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