Blockade Coping: Huawei Delays

Civil War blockade

“We now see the postponement of the mass production of Mate series will be for at least one to two months,” Nikkei quotes, as Huawei develops new designs to use Mediatek and perhaps Samsung processors. Blocking TSMC at Hisilicon is forcing Huawei to scramble for alternate chip sources. Alternate chips are never exactly the same and time needs to be taken for redesign.

Samsung may be able to produce 7 nm advanced chips for Huawei despite the U.S. blockade. “It has built a small, 7nm production line that doesn’t use U.S. equipment,” Lucy Liu reports at EET Asia. There’s no official confirmation, but EE Times has a strong reputation for accuracy.

Nikkei and others have reported that Huawei has 6 to 18 months of chips stockpiled.

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Huawei’s phone sales up 29% Q3

Huawei sold 67 million smartphones in Q3, 18% of the world market. Samsung is ahead at 22% but the gap is narrowing quickly. The US boycott is having some effect, especially in Europe. Otherwise, Huawei would be on track to catch Samsung at the end of this year.

After two years of stagnation, smartphone sales climbed by 2%. The figures are from Strategy Analytics, a respected source. (Full release below) The boom in China 5G is key to Huawei’s success.

Apple and almost everyone else saw sales drop. Apple is confident they will sell 80 million 5G phones, although they probably won’t launch until September.

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Huawei: Samsung’s 5G soon illegal in China

Starting January 1 2019, China will require all new phones to support the SA 5G core. The nominal reason is China wants to promote the SA core. Huawei 5G chips are ready for SA but no others are.

On Weibo, Huawei’s consumer business CEO Yu Chengdong wrote, “I hope everyone can provide true 5G mobile phones. NSA will soon be eliminated, SA is true 5G.” Sina.com believes that’s an indirect warning about Samsung.

Zhang Daijun of Samsung Mobile replied,

NSA and SA have no perceptual difference to ordinary users, and SA will have different perceptions for some industry users.

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100M phones in 5 months as Huawei chases Samsung

Huawei sold 100 million phones in the first 149 days of 2019, despite the U.S. issues. Growth at that rate would easily take sales past 250 million.

In Q1 2018, Samsung had 23.5% of the phone market and Huawei 11.8%. In the first quarter of 2019, Samsung had 23.0% of the market and Huawei 18.9%.

Xiaomi, Vivo, and Oppo also increased sales. The share of “other” fell from 27.6% down to 22.7%. That corresponds to disappointing financial results at Sony & Lenovo.

Apple’s Q4 was 18.3% as it released new iPhones. But Q1 2019 was only 11.8%, down from 15.7% in Q1, 2018.

If Apple doesn’t find a way to bring 5G to the 2019 iPhone, it will be a very disappointing year.

Meng extradition to U.S. advancing

Months or years in court. I nearly laughed out loud at a Canadian Department of Justice statement, “Canada is a country governed by the rule of law. The decision on whether to issue an authority to proceed was made by Department of Justice … officials who are part of a non-partisan public service.”

Chinese official Xie Maosong thinks the Canadians will resist U.S. political pressure. “My personal assessment is that there should be some sort of deal in March and Meng Wanzhou will likely be released in April or May.”

If lying to bankers were a criminal offense, Donald Trump would be on the way to jail after Michael Cohen’s testimony. Trump, according to Cohen, repeatedly added US$billions to his bank filings.

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