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Recently, the U.S. Secretary of Commerce announced that a complete ban on chip exports to Huawei is being considered. This move will undoubtedly escalate sanctions against Huawei again. Experts point out that if the United States really takes this extreme approach, it will be the United States itself that will hurt the most.
Huawei has been prepared for a long time, and its self-developed chips are progressing smoothly
Since last year, Huawei has realized that the supply of chips will face a serious threat. To this end, they laid out early and increased investment in independent research and development.
At present, Huawei's self-developed chips in various fields such as communications, servers, and artificial intelligence have made great progress, and can meet most of its own needs.
For example, Huawei's self-developed Ascend server processor adopts a new architecture, and its performance has reached the advanced level of similar products. In terms of communication base stations, Huawei's Kirin chips also have strong capabilities and do not need to rely on external supply.
In addition, Huawei's self-developed da Vinci architecture has also achieved good performance in the field of artificial intelligence. Overall, Huawei's self-sufficiency rate in core chips has exceeded 75%.
It is foreseeable that if the United States completely cuts off the supply of chips, Huawei will not be dealt a fatal blow in the short term. They have enough technical strength and accumulation to rely on their own chips to meet the needs of their business. That's a huge change from two years ago.
China's domestic demand market is sufficient to support Huawei's business scale
It should be noted that China accounts for nearly 50% of Huawei's global market. The market demand in China alone is enough to sustain Huawei's operations.
In the past two years, Huawei's overseas market share has declined significantly under the pressure of the United States, but its share of the Chinese market has steadily increased.
Taking 5G as an example, Huawei has achieved more than two-thirds of the market share in China. China will build more than 1 million 5G base stations this year, which will bring considerable business volume to Huawei.
In terms of smartphones, Huawei has also jumped to the first place in China. With its strong brand influence and product strength, Huawei is confident that it will continue to expand its share in the Chinese market.
It can be said that even if the United States completely cuts off the supply of chips, relying on China's huge domestic market, Huawei still has enough room to maintain large-scale operations. This also provides a valuable window of time for Huawei's independent innovation.
U.S. chip companies will lose huge profits
What needs to be seen is that if the United States really adopts extreme sanctions, its chip companies will also become the biggest victims.
Taking Qualcomm as an example, shipments to Huawei reached $8 billion in 2020, accounting for nearly 20% of its total revenue. If the supply to Huawei is cut off, it will inevitably be hit hard.
A similar situation exists in companies such as Intel. In fact, in the past two years of sanctions against Huawei, the profit growth rate of many chip companies in the United States has slowed down significantly.
If exports to Huawei are completely cut off, these companies may face the dilemma of declining performance.
Suppliers who have accumulated important business relationships with Huawei over the years will find it difficult to re-establish cooperation once the cooperation is interrupted. This will undoubtedly affect their relationships with other Chinese manufacturers as well.
Therefore, if the strength is not good, American chip companies may become "cannon fodder". This is also a question that the US government needs to ponder.