Qualcomm 4G chips can't be bought, and Huawei is once again at a crossroads

Silicon-based laboratory

2024-05-11 14:21Posted in Jiangsu Science and Technology Creators

Qualcomm 4G chips can't be bought, and Huawei is once again at a crossroads

The research and planning of the semiconductor industry focuses on the interpretation and analysis of Qualcomm Intel's cancellation of the license to export 4G products to Huawei.

Text | Su Yang

The "tight spell" on Huawei's head has been tightening.

If you were to make a list, there would probably be hundreds, with cases dating back to 2011, when the U.S. House of Representatives launched a security investigation into foreign companies, and the most "memorable" ones should be 2019 and 2020.

On May 15, 2019, the U.S. Department of Commerce included Huawei in the Entity List, and after this point in time, all companies that use U.S. technology and Huawei's "business" must obtain permission from the U.S. Department of Commerce. Therefore, when the temporary license was extended for the last time in May 2020, Huawei urgently issued an additional 15 million Kirin 9000 processor foundry orders to TSMC, with a total value of 700 million US dollars.

The past four years have been a mixed bag for Huawei.

The good news is that Huawei continues to explore and move forward on the road of self-development, and the self-manufactured Kirin chip was successfully launched on the Mate 60, and a small iteration on the P70 generation of products, and the revenue is also increasing year by year, and last year it returned to the ranks of the "top 5 domestic mobile phones"; The bad news is that the sanctions on Huawei are constantly increasing and refining, in the past, it was not allowed to sell advanced chips to Huawei, nor can it manufacture chips for Huawei, but now this restriction is about to shrink to the supply of products such as 4G and WiFi.

01. Qualcomm has a "forecast" off the shelves

A few days ago, foreign media reported that the U.S. Department of Commerce canceled the licenses of some U.S. companies to export semiconductor products to Huawei, and then the U.S. Department of Commerce confirmed the authenticity of the news, but did not mention the name of the U.S. company.

In its filings with the SEC, Intel acknowledges receipt of notice of cancellation of license and acknowledges compliance with export control regulations. Qualcomm did the same, but went a step further and explicitly canceled the license to ship to Huawei directly in the SEC filing.

"On May 7, 2024, the U.S. Department of Commerce notified Qualcomm that it is revoking the company's license to export 4G and certain other integrated circuit products, including Wi-Fi products, to Huawei Equipment Co., Ltd. and its subsidiaries and subsidiaries, effective immediately," Qualcomm mentioned in the original article. As disclosed in our Form 10-Q filed on May 1, 2024, we do not expect to receive product revenue from Huawei beyond the current fiscal year. ”

Reading carefully, this sentence has multiple meanings: first, Qualcomm confirmed that it was the license to Huawei that was canceled, involving 4G and WiFi products; Second, Qualcomm has expectations for the cancellation of the supply license to Huawei, which was originally expected to end in 2024, which means that it has been communicating with the U.S. Department of Commerce before the cancellation notice; In the end, Qualcomm did not expect the export license to be canceled so soon.

It is not only Qualcomm that issued a weather forecast for the "cancellation of export license to Huawei", as early as September last year, the well-known analyst Mingchi Kuo issued an early warning to the outside world, in contrast, the former is a passive abandonment, Guo Mingqi emphasized that Huawei will take the initiative to remove Qualcomm.

Guo Mingqi posted in early 2023 that Qualcomm is the main loser in Huawei's adoption of Kirin 9000S and other Kirin chips, source: X

Guo Mingqi said that as Huawei switches to self-developed processors, Qualcomm will become the biggest loser and will lose all Huawei orders in 2024, stressing that "due to competition from Huawei, Qualcomm's shipments to mobile phone brands in Chinese mainland in 2024 will decline by 50 million to 60 million units compared to 2023." ”

According to the data provided by Guo Mingqi, Huawei alone will purchase 23 million to 25 million processors from Qualcomm in 2022 and 40 million to 42 million processors in 2023.

The above Huawei purchases are Qualcomm's 4G products, and this license can be traced back to November 2020, when a Qualcomm spokesperson confirmed to the media, "We have obtained licenses for several products, including some 4G products." ”

In November 2023, Qualcomm once again confirmed the validity of this license, but The Paper quoted sources familiar with the matter as saying, "This is good news for Huawei, but it can't actually solve Huawei's big problem", according to a Huawei insider, 4G chips are rarely used in the domestic market, and some tablets and low-end mobile phones in overseas markets can be used.

Combining the above things, first, it is a fact that the export license for Huawei's 4G and other products has been cancelled; Secondly, Huawei's self-developed processor has the conditions to remove Qualcomm from the shelves after it is on the right track; Again, Qualcomm's 4G products are helpful to Huawei, but not much.

02. Replica Apple's ARM-based road

With the increase in the production capacity of self-developed 5G chips, it has become a foregone conclusion to give up the purchase of Qualcomm's 4G products, which has also been confirmed by Leslie, a senior practitioner and an expert in the construction of the front end of the semiconductor company.

"Huawei has decided that it will no longer pull goods with Qualcomm since the Kirin 9000S surfaced in the second half of last year, and only low-end SOC inventory is currently on sale, and the cancellation of Qualcomm's Lisense has no impact on Huawei."

In contrast, Intel and AMD have a relatively greater impact on Huawei's supply, "At present, Huawei's PC is still dominated by Intel and AMD's X86 CPU, which will inevitably have an impact", but Leslie also stressed, "Huawei is full of stocks this year, and the supply is safe, but in the face of the annual sales of PCs of nearly 10 million, the existing stock cannot solve the long-term problem." ”

For Huawei, there is only one solution to the problem, the whole product line introduces ARM architecture processors, and uses self-developed chips to cover the needs of PCs and tablet devices.

In 2021, Apple introduced the first-generation ARM-based M-series chips on Macbooks, which have been launched for four generations so far, and recently debuted the M4 processor using TSMC's N3E process on the iPad, with a total of 28 billion transistors.

It is said that He Tingbo, chairman of HiSilicon, and Yu Chengdong, chairman of Huawei's terminal BG, issued a letter to his comrades-in-arms internally, proposing that the spare tire plan for PC-side chips was officially turned positive, and asked HiSilicon and the terminal BG to do their best to bring products equipped with the "Kirin X series (tentative name)" PC platform to the market within this year with the fastest speed and highest quality.

Soon, this news was denied by Huawei in the voice of a person familiar with the matter, but there is still room for discussion. First of all, the fake news was confirmed by people familiar with the matter, and Huawei's official did not have a clear caliber, which is a bit like a pipa half-covering the face; The second is that the response to the fake news is more general, and there is no confirmation whether the Tower Hill project is fake news or the PC side Kirin X is fake news.

In any case, the comprehensive ARM path has not only been verified as feasible by Apple, but Huawei also has to choose. Now the core lies in whether the production capacity of self-developed ARM chips can not keep up with the demand for desktop products in addition to covering the needs of mobile and GPU products.

According to the data provided by Leslie, the production capacity of N+2 has increased from 7K to 20K this year, which can cover the demand for mobile phones and GPUs, "Intel's inventory can meet the demand of this year (PC), and the spare tire of the PC version of the Kirin processor will need to be turned positive next year."

According to the current time rhythm, it is speculated that the second half of the year may be N+3, and the production capacity should be arranged to Kirin 9100, and the processor used in the rumored PC and tablet is likely to be N+2, and by the end of the year, the production capacity of N+2 may be further increased at the level of 20K.

Apple's M1 Ultra has two M1 Max chips, which are packaged through the UltraFusion package architecture, bringing the number of transistors to 114 billion. SOURCE: APPLE

As for the relatively backward process, or the problem of "insufficient performance" and "insufficient competitiveness" due to the insufficient number of transistors, Apple also provides a catch-up idea in the M1 Ultra and NVIDIA's B200.

For example, in the design of the M1 Ultra processor, Apple adopts a package architecture called UltraFusion, which achieves an increase in transistor density through die stitching technology (which is known as "glue chip").

Xindong also quoted Chen Wei, chairman of Qianxin Technology, as saying that UltraFusion, a package architecture, provides a dense and short metal interconnect between logic chips or between logic chips and memory stacks. Better chip-to-chip integrity, lower energy consumption, and the ability to operate at higher clock rates. At the same time, compared with the traditional CoWoS package, it can better avoid the problem of bad chips and improve the packaging yield.

For Huawei, when the process cannot be further advanced, or more advanced production capacity needs to be allocated to mobile phones and GPUs, the adoption of an UltraFusion-like packaging architecture to increase transistor density through "splicing" can further continue Moore's Law.

Next, it depends on when Huawei will be fully ARM like Apple, and the specific time node depends on how long the stock X86 CPU can last.

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