Joe Madden, a well-informed analyst, writes,
During late 2018, Huawei started ramping up their purchasing of key semiconductors for their 5G base station platform. By May 2019 [Huawei] had inventory equivalent to 100,000 additional base stations using 64T64R MIMO.
Yes, that’s a pile of 20 million amplifiers and millions of FPGAs. It’s a commitment of at least $400 million for “extra” inventory, in addition to their immediate production requirements.
FPGA’s (Field Programmable Gate Arrays) are designed to replace a circuit board with a single, easily configured chip. They are the right choice for the initial design and any product that’s not being sold in high volume. As product volume goes up, they are usually replaced with a dedicated chip, an “Application specific integrated circuit.”
Xilinx and Intel/Altera, both U.S. companies, dominate the top of the market.
They produce FPGA’s with millions of logic gates and sophisticated components. Intel offers a complete 20 core Xeon processor on an FPGA for about US$6,000/chip. For huge servers and clouds, that’s affordable.
Madden believes Huawei will find it particularly difficult to replace FPGA’s with both analogue and logic components. The incoming analogue radio signal needs to be converted to digital. It is faster and more efficient to do that on a single FPGA.
Huawei is building 5G radios at an unbelievable rate. 150,000 have already shipped; more than a million are in the pipeline for the next two years. Even with the huge inventory, Madden fears that Huawei will run out of the components in a few months.
I’m more confident Huawei will be able to engineer a satisfactory substitute. An ASIC might cost US$5 million to build from an FPGA prototype. If Huawei needed five of them, that would be $25 million.
Spread over 500,000 radios in the next year, that would add $50 to the cost. Not insignificant, but affordable in a radio that sells for $5,000 and up.
Dozens of other companies produce FPGA’s that would be partial substitutes, including GOWIN Semiconductor in China. But only Xilinx and Intel make the most powerful and fastest units.
Huawei has already replaced 30% of the radio frequency (RF) parts for the Mate 20 5G phone.
[…] Huawei has protected itself with an inventory of hundreds of millions of dollars worth of components…It would be possible to switch to non-U.S. suppliers, but the parts are bigger and less efficient. Without the Americans, Huawei phones might have to be slightly larger. […]