Becoming China’s number one chip supplier, Huawei’s semiconductor design unit overtook the U.S giant, Qualcomm for the very first time. With the sales of the latter company already being drastically hit due to the Coronavirus impact, this is another shock.
According to a recent report by China-based CINNO Research, HiSilicon, the name of Huawei’s design unit, shipped around 22.21 million smartphone processors in the first quarter of this year. CINNO Research tracks China’s semiconductor market.
The figures are similar to the numbers shipped in the same period in 2019. In fact, HiSilicon has managed to increase its market share from 24.3% in the first quarter of 2019 to 43.9% in this year’s first quarter.
HiSilicon designs chips that go into Huawei’s smartphones, under the Kirin brand.
Although CINNO research didn’t disclose shipment figures for other vendors like Qualcomm, it did say that the U.S firm’s market share has fallen from 48.1% to 32.8%, when comparing the March quarters of 2020 and 2019.
This massive growth of HiSilicon highlights how Huawei has been shifting its focus on its domestic market ever since being put on the U.S blacklist last year known as the Entity List.
Being put on the list restricted Huawei’s access to American technology including Google‘s Android operating system. This proved to be catastrophic for international customers of the company as popular Google services such as Gmail weren’t available anymore.
Shifting its focus entirely on China where this ban doesn’t make a difference as Google services were already outlawed, Huawei has worked on growing its share in the country’s smartphone market.
This growth, however, has led to losses for its domestic rivals including Qualcomm.
Qualcomm CEO Steve Mollenkopf accepted that Huawei’s focus on the Chinese market was hurting his company. He told investors on an earnings call, “As a result of the export ban, Huawei shifted their emphasis to building market share in the domestic China market where we do not see the corresponding benefits in product or licensing revenue.”
To put things into a perspective, Qualcomm sells chips to Huawei’s domestic rivals like Oppo and Xiaomi, both of which according to a research firm Canalys, saw their shipments decline in 2019.
The overall smartphone market has weakened in the midst of the coronavirus outbreak. Official data issued by the Chinese government bring light to how after enjoying a 56% plunge in February, the smartphone shipments have fallen to 23.3% in March.