The impact of Intel and Qualcomm's withdrawal on Huawei
In May 2019, the U.S. government added Huawei to the "Entity List" and banned U.S. companies from selling components to Huawei, and Intel and Qualcomm, global chip giants, immediately announced that they would stop supplying Huawei. This has undoubtedly had a major impact on Huawei's chip supply.
Huawei has long relied on foreign chip suppliers, and a large number of processors and baseband chips for its smartphones and 5G base stations come from American chip giants such as Intel and Qualcomm. Once the supply is interrupted, Huawei's production and manufacturing will be severely affected. It is estimated that the withdrawal of Intel and Qualcomm could lead to a decline of about 30% in Huawei smartphone shipments.
Huawei has been preparing for a long time and has been developing its own chip Kirin series for many years. Although the performance of the Kirin chip is slightly inferior to that of Qualcomm's flagship chip, it can already meet the needs of most mid-to-high-end smartphones. Huawei can use Kirin chips to partially cushion the impact of Intel and Qualcomm exiting.
The response of the Chinese government and enterprises
In the face of Intel and Qualcomm's withdrawal, the Chinese government and companies have launched a multi-faceted response. On the one hand, the Chinese government attaches great importance to the development of the chip industry and has formulated a number of policies to support the development of domestic chips.
In 2014, the State Council issued the "National Integrated Circuit Industry Promotion Outline", proposing the goal of achieving a self-sufficiency rate of 70% in domestic chips by 2030. In 2020, China issued the "Several Policies for Promoting the High-quality Development of the Integrated Circuit Industry and the Software Industry in the New Era" to further increase support for the chip industry.
With the support of policies, Chinese chip companies such as SMIC and China Resources Shanghua have developed rapidly in recent years, and have made great progress in terms of process technology and production capacity, which are expected to replace Intel and Qualcomm to a certain extent.
On the other hand, China still maintains strong strength in other technological fields such as artificial intelligence, 5G communications, and new energy vehicles. Even if it temporarily lags behind in the field of chips, the overall strength of China's technology industry has not been hit hard.
Taking artificial intelligence as an example, Chinese companies such as Baidu and SenseTime are leading the world in AI fields such as computer vision and speech recognition. In terms of 5G communications, Huawei, ZTE and other enterprises are also at the forefront of the world in 5G technology and equipment.
The impact of U.S. sanctions and China's response
In the long run, U.S. sanctions on Chinese technology companies such as Huawei are aimed at curbing China's technological development, but they may also accelerate China's autonomy and control in key areas.
The withdrawal of Intel and Qualcomm has undoubtedly dealt a serious blow to Huawei, but it has also made the Chinese government and companies aware of the risks of over-reliance on foreign technology. China is expected to increase investment, accelerate the pace of independent innovation in science and technology, and achieve breakthroughs in key areas such as chips as soon as possible.
In cutting-edge science and technology fields such as artificial intelligence, quantum computing, and aerospace, Chinese enterprises and scientific research institutions have made some important progress. If it can obtain sustained policy and financial support, China is fully expected to catch up with or even surpass the United States in these areas in the next 10-20 years.