The $10.8 billion question: Can Qualcomm survive Huawei new chip challenge?

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Introduction of Can Qualcomm survive Huawei new chip challenge

Qualcomm is one of the world leading chipmakers supplying chips for smartphones, laptops cars and other devices. The company makes most of its money from licensing its patents and technologies to other manufacturers such as Apple Samsung and Xiaomi.

Qualcomm is facing a new and formidable rival Huawei.

The Chinese tech giant has been developing its chips for years and recently launched its latest flagship processor the Kirin 980. This chip is said to be faster more efficient and more advanced than Qualcomm Snapdragon 845 which powers many top Android phones.

Huawei claims the Kirin 980 can handle artificial intelligence tasks better than any other chip, thanks to its dual neural processing units (NPUs). It also supports 5G connectivity next-generation mobile networks offer faster speeds and lower latency. Huawei says the Kirin 980 will power its upcoming Mate 20 series of smartphones, which are expected to launch in October.

So what does this mean for Qualcomm?

There are several factors to consider when answering these questions. First of all Qualcomm competes with Huawei and other chipmakers such as Samsung MediaTek, and Intel. Each of these companies has strengths and weaknesses and targets different market segments. For example Samsung makes chips for its own devices and some of Apple iPhones. MediaTek focuses on low-cost and mid-range devices especially in emerging markets. After dominating the PC market for decades Intel is trying to gain a foothold in the mobile market.

The $10.8 billion question: Can Qualcomm survive Huawei new chip challenge?

image credit huawei central

Can the American company survive Huawei’s new chip challenge?

Qualcomm’s business model is based on selling chips and licensing its intellectual property. Qualcomm earns royalties from every device that uses its technologies, such as CDMA, LTE, and 5G. Qualcomm has over 130000 patents and applications worldwide covering various aspects of wireless communication. This gives Qualcomm a competitive edge over other chipmakers, who must pay Qualcomm to use its IP.

How will this affect the global smartphone market?

Qualcomm’s licensing business is also threatened by legal disputes and regulatory investigations. Several governments and companies have accused Qualcomm of abusing its dominant position and charging excessive fees for its patents. For example Apple has been suing Qualcomm since 2017 over patent royalties and has stopped using Qualcomm’s chips in its latest iPhones. The US Federal Trade Commission (FTC) has also petitioned file against Qualcomm for antitrust violations alleging that Qualcomm has used unfair tactics to maintain its monopoly in the chip market. These lawsuits could result in lower revenues and higher costs for Qualcomm.

image credit smartprix

Qualcomm future depends on how well it can meet the market changing needs. The smartphone market is slowing down as consumers hold onto their devices longer and look for more innovation and differentiation. The chip market is becoming more complex and diverse as new technologies and applications emerge such as artificial intelligence augmented reality virtual reality the Internet of Things autonomous vehicles and cloud computing. These require new chips to handle more data and computation at lower power consumption.

History of Qualcomm

Qualcomm has invested heavily in research and development (R&D) to stay of the curve. The company spent $5.5 billion on R&D in 2017 or about 23% of its revenue. Qualcomm has also been acquiring other companies to expand its portfolio and capabilities. For example 2016 Qualcomm announced a $47 billion deal to buy NXP Semiconductors. This Dutch company makes chips for cars and IoT devices. However, this deal was blocked by China amid the ongoing trade war between the US and China.

The $10.8 billion question: Can Qualcomm survive Huawei new chip challenge?

Qualcomm is working on its next-generation chip.

Qualcomm has also been working on its next-generation chip the Snapdragon 855 which is expected to launch later this year or early next year. This chip will compete with Huawei Kirin 980 and Apple A12 Bionic chips The Snapdragon 855 will feature a dedicated AI engine a 5G modem and improved performance and efficiency.

In conclusion

Qualcomm is facing a tough challenge from Huawei and other rivals in the chip market. But Qualcomm is not giving up easily. The company has a strong IP portfolio a large R&D budget and a loyal customer base. Qualcomm also has an opportunity to lead the transition to 5G networks and devices. The question is whether Qualcomm can survive the legal and regulatory hurdles hampering its growth and innovation.

FAQs about Can Qualcomm survive Huawei new chip challenge

Q; Can Huawei use Qualcomm?

A: No, Huawei cannot use Qualcomm chips because of the US sanctions that ban American companies from selling to Huawei.

Q; Who makes semiconductors for Huawei?

A: Huawei used to buy semiconductors from various suppliers such as Samsung, MediaTek and TSMC. But now Huawei is facing a shortage of chips because of the US restrictions.

Q: Can Huawei make their chips?

A: Yes Huawei can make its chips through its subsidiary HiSilicon. However, Huawei still relies on external vendors for critical components and tools needed to produce chips.

Q: Why can’t Huawei make their chips?

A: Huawei can’t make its chips because it needs advanced technology and equipment to manufacture chips at the same level as its competitors. Huawei also needs help accessing raw materials and talent for chip development.

Q: Who makes 5G chips for Huawei?

A: Huawei makes 5G chips for its own devices through HiSilicon. Huawei’s 5G chips are called Kirin and Balong. However, Huawei may run out of its 5G chip stock soon because of the US sanctions.

Q: Who is Huawei’s chip provider?

A: Huawei does not have a single chip provider. Huawei sources chips from different vendors depending on the type and function of the chip. For example Huawei may use Qualcomm chips for some of its smartphones MediaTek chips for some of its tablets and TSMC chips for some of its network equipment.

Q: Will Huawei get Google back?

A: Huawei will likely get Google back sometime soon. Google is an American company that has to comply with the US government’s ban on doing business with Huawei. Unless the US changes its policy or grants an exemption to Google Huawei will not be able to use Google services and apps on its devices.

Q: Why Samsung is better than Huawei?

A: In some aspects Samsung is better than Huawei such as having a more diverse product portfolio a larger market share a more substantial brand reputation and a more secure supply chain. Samsung also has an advantage in chip production as it has its fabrication plants and does not depend on external vendors.

Q: Who manufactures 5G RF chips?

A: A 5G RF radio frequency chip enables wireless communication for 5G devices. There are many manufacturers of 5G RF chips such as Qualcomm, Broadcom, Skyworks, Qorvo, MediaTek and Samsung.

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