As Huawei's Executive Director and CEO of the Consumer Business Group, Richard Yu, loudly declared in early August that "Huawei's flagship smartphones are making a comeback," the announcement has led to speculations of Huawei's imminent return to 5G smartphone market.
Furthermore, Chinese media previously quoted industry sources indicating that Huawei's 5G smartphones are expected to start shipping around the end of 2023, with the earliest possible launch in October. All these indications seem to suggest that Huawei's return to the 5G smartphone market is on the horizon.
Recent reports from Chinese media have also revealed that a certain company is testing 5G baseband chips and SoCs with the integrated performance of these SoCs aiming to be just slightly below flagship level. The model featuring these chips may be positioned as a flagship handset. This testing company is speculated to be Huawei.
On the other hand, during Qualcomm's latest earnings conference call, the company's management team clarified that they have not received permission to supply 5G chips to Huawei. In the foreseeable future, the revenue from selling 5G chips to Huawei is expected to remain at zero.
This statement by Qualcomm aligns with previous comments from Huawei's Richard Yu to Chinese media First Financial. He had stated that Qualcomm had not resumed supplying 5G chips to Huawei.
Given that external procurement is not feasible, Huawei has no choice but to be self-sufficient. Reuters, Nikkei, and other media outlets have been citing unnamed research institutions since July, reporting that Huawei is partnering with SMIC to develop chips. This further strengthens the rumors of Huawei's return to the 5G smartphone market.
Now, with news of Huawei testing 5G modem chips and SoCs, it seems to confirm the speculation that Huawei is indeed preparing to re-enter the 5G smartphone market.
As early as September 2019, Huawei unveiled the flagship Kirin 990 5G chip at IFA. The SoC was manufactured using TSMC's 7nm process and integrated a 5G modem chip called Balong.
With Huawei returning to the 5G smartphone market, and the option of procuring Qualcomm chips unavailable, whether or not Huawei reintroduced Kirin SoCs or integrates 5G Balong modem chips separately from APs, Huawei's subsidiary HiSilicon's capabilities in IC design remain strong. However, Huawei can only rely on SMIC for production.
It's worth noting that due to SMIC's yield rate and production capacity at the 7nm node, the industry estimates that Huawei's 5G smartphone shipments could be around 2 to 3 million units.
However, if Huawei truly overcomes the challenges of the Chinese supply chain and successfully brings 5G smartphones back into the market, its strategic impact might be even more impressive than selling millions of 5G smartphones.
