(Jiweinet report) “Any chips currently designed by HiSilicon cannot be produced, and it itself is a chip design department in Huawei, not a profitable company, so Huawei has no profit appeals on its own.” Huawei’s vice chairman, rotating. Chairman Xu Zhijun answered questions from reporters at Huawei’s 2021 Global Analyst Conference.
Vice Chairman of Huawei, Rotating Chairman Xu Zhijun
He believes that as long as the HiSilicon team is still there, continue to do chip research, develop and accumulate for the future, one day it will still be able to solve the current dilemma.
Xu Zhijun also shared the performance of Huawei in 2020 at the analyst conference. Huawei’s 2020 sales revenue was 891.4 billion yuan, a year-on-year increase of 3.8%, and its net profit was 64.6 billion yuan, a year-on-year increase of 3.2%.
Xu Zhijun said that in 2021, Huawei will still face challenges, including US sanctions on Huawei, repeated epidemics, and uncertainty caused by geopolitics. For Huawei, it needs to optimize its industrial portfolio and enhance its resilience.
HiSilicon’s self-developed IP, precipitation technology
Due to U.S. sanctions, TSMC and other foundries will not be able to produce chips for Huawei since September 15, 2020. No matter 5nm, 7nm mobile phone chips or 16nm, 28nm (including HiSilicon’s self-developed TWS headset Bluetooth chip), they will Production is prohibited.
Regarding the current status of the Huawei HiSilicon team, Huawei announced its 2020 performance in Shenzhen on the afternoon of March 31. Huawei’s rotating chairman Hu Hou said that the HiSilicon team is still stable.
At the Huawei Global Analyst Conference on April 12, Huawei’s vice chairman and rotating chairman Xu Zhijun bluntly stated that the chips currently designed by HiSilicon cannot be produced, and Huawei’s positioning of HiSilicon is not a profitable department, so it will Continue to raise HiSilicon and continue to do research on chip design until it breaks through the predicament.
A chip design practitioner told reporters: “Huawei HiSilicon still has a lot of measures to deal with sanctions, including the outsourcing of HiSilicon, or the establishment of a production line not restricted by the United States by a company within the United Nations, or waiting for the domestic semiconductor ecosystem. Mature. Combine more points and seek breakthroughs.”
“Hisilicon has subdivided departments, which are divided according to the process nodes and product positioning used. Some departments are less affected, and some departments have a greater impact.” The chip designer said.
A HiSilicon insider Zhang Jun (pseudonym) revealed that HiSilicon transferred the 2020 freshmen who originally designed the chip directly, and most of them went to the computing product line. “HiSilicon’s business contraction is affirmative, and the new employees of the Kirin chip department after July 2020 will also be transferred.” Zhang Jun told reporters.
However, Zhang Jun pointed out that the core strength of the HiSilicon team is still stable. It only transfers some freshmen or new employees to businesses that are not significantly affected by the sanctions based on the volume of business. The core strength of the original team is still doing the key. The basic IP research and development.
“It is expected that in the coming years, the workload of HiSilicon employees will be heavier, and the income may also be reduced to a certain extent. The reason is that under US sanctions, many IPs purchased in the past will need to be redesigned by themselves, and the short-term workload will increase. Great, but this is also an opportunity for employees to improve their abilities.” Zhang Jun explained the reason.
The impact of sanctions on HiSilicon is still relatively large. The decline in business volume will inevitably bring about certain insider changes, and the increase in salary ranks will slow down, and the workload will increase. This cannot be denied.
However, from the perspective of employees, working in HiSilicon is still the best choice to obtain good ability enhancement and career development prospects. “As long as the company is willing to continue to sign a contract with me, I will continue to do it!” Zhang Jun expressed The voice of most HiSilicon employees.
At the Huawei company level, Xu Zhijun also expressed his determination to continue to support and “provide” HiSilicon. Even if HiSilicon’s business has fallen sharply in recent years, relying on Huawei’s revenue and volume in other areas, there will be no major problems in maintaining HiSilicon’s operations.
In addition, I took advantage of this opportunity to immerse myself in self-developed IP, optimize the platform, settle the research and development results and experience, and wait for the opportunity to break through.
Mobile phones are out of stock, Hongmeng IoT is on the top
In 2020, limited by the U.S. ban, Huawei’s mobile phones face coreless usability, and the Honor brand will be split and independent.
However, looking at Huawei’s finances in 2020, Huawei’s consumer business will still generate 482.9 billion yuan in revenue in 2020, achieving a year-on-year growth of 3.3%. This was mainly due to the rapid growth in sales of PCs and tablets, which offset the decline in sales of mobile phones.
“All-scenario IoT devices equipped with the Hongmeng system will become a new growth point for Huawei in 2021.” said Liang Ming (pseudonym), a Huawei dealer.
Huawei’s consumer business still adheres to the “1+8+N” full-scenario smart life strategy. It will focus on the “1” of mobile phones and focus on the “8” (tablets, PCs, wearables, HD, AI speakers, headsets, VR, cars). Machine) and “N” (Pan IoT) growth potential.
Since chips cannot be produced, Huawei relies on inventory to maintain its mobile phone business, and it cannot supply large quantities to the market. Liang Ming told reporters: “There are many popular models that are out of stock, such as the Mate 40 series, which is out of stock for a long time.” However, many dealers have turned to customers to recommend Huawei’s smart ecological products, such as smart watches, PCs, and tablets. Wait.
“The growth rate of consumer business last year did not meet expectations. Huawei’s terminal business has been advancing by leaps and bounds, but last year due to supply problems, mobile phone sales were affected and sales declined.” Huawei’s rotating chairman Hu Hou said, consumer business The slowdown in growth is mainly due to supply issues.
According to data from the research organization CINNO Research, in January this year, Huawei, after the spin-off of Honor, only ranked fourth in domestic shipments. According to the forecast of Strategy Analytics, in 2021, Huawei’s global shipments will not even enter the top five and will be classified as “other”.
Source: Couterpoint
According to Counterpoint’s latest statistics, in February 2021, Huawei’s global market share was only 4%, but it should be pointed out that in the past, Huawei’s mobile phone global market share was calculated together with glory. When Honor is split, the chip is still in short supply. Huawei must plan to increase the volume so as to maintain its voice and popularity in the flagship mobile phone market.
From the perspective of consumer business, despite the decline in mobile phone shipments, Huawei’s wearable device shipments in 2020 increased by 50% year-on-year to 43.5 million units, ranking third in the world and first in China. In addition, sales of products including PCs and tablets also increased by 65% year-on-year. Hu Hou pointed out that this partly offset the decline in mobile phone sales.
Hu Hou pointed out that this year’s supply situation is still not clear and it is difficult to predict what will happen to the mobile phone business, but the flagship model originally planned to be launched will not change. The implication is that the P50 series and even the Mate 50 series in the second half of the year are already in the plan. I believe it will still be equipped with the Kirin 9000 chip, and the Hongmeng system will be used for the first time.
In the coming time, Huawei still believes that its flagship high-end mobile phone will maintain a certain lead. In addition, Huawei’s consumer business includes not only mobile phones, but also other consumer products, and it has always created a full-scene experience.
The Hongmeng system is the key to the software for building a full-scene ecosystem. It is a distributed operating system oriented to full-scenarios. It has been used in large screens, cars, and other fields, and will also be logged on to mobile phones this year. Hu Hou revealed that more than 20 hardware manufacturers and more than 200 software manufacturers have participated in the relevant R&D cooperation of Hongmeng System.
“It is believed that Huawei’s mobile phone-based business structure will undergo certain changes to preserve the roots of mobile phones, based on ICT connection technology, and relying on the development of the Hongmeng system to gradually build multiple IoT scenarios such as PCs, bracelets, and smart screens. Ecology.” Liang Ming put forward his own opinions.
Looking forward to the global restoration of industrial chain cooperation
In 2021, Huawei’s two major business directions will not change: one is to focus on ICT infrastructure and act as an enabler of social digital transformation; the other is to focus on consumers and create a full-scenario smart life experience. Huawei is still stuck with the US sanctions and bans, and it also calls for the resumption of global industrial cooperation.
Hu Hou said that in the past two years, in response to sanctions, Huawei has invested considerable resources in purchasing chips to meet customer needs, especially the chip inventory required by TO B users. He pointed out that the industry chain situation based on global cooperation will still be the mainstream of the industry, and Huawei will insist on open cooperation and innovation.
Regarding the current lack of order in the semiconductor supply chain, Xu Zhijun believes that the current shortage of chips and rising prices are due to the de-globalization of the semiconductor supply chain, which has led to an increase in the cost of the global chip industry.
In the past three years, the United States has imposed three rounds of sanctions on Huawei, which have continued to affect and hurt Huawei. The sanctions not only harm Huawei, but also have an impact on global semiconductors, destroying the performance of the global industrial chain, and allowing more countries and individuals to consider semiconductor supply chain security issues. For example, many countries such as Europe are taking measures to increase the autonomy of semiconductors. U.S. sanctions have caused all companies to change from “hoping to achieve zero inventory” to now hoarding stocks under panic, causing tension in the supply chain.
Xu Zhijun believes that the current price increase of chip foundry, the price increase in the next few years (chips, electronic products) is a predictable thing. Sanctions are evolving into global and industry-wide supply shortages, and the future economic crisis caused by it is still unknown.
The current global shortage of automotive chips appears to be caused by the imbalance between supply and demand caused by the epidemic, but the more internal reason is that the system stability of the global supply chain is gradually being eroded. “In the future, it is possible to split the supply chain into the US system and the non-US system. Of course, this is a situation that no one wants to see.” Chen Yuenan, a senior analyst at Jiwei Consulting, analyzed.
Therefore, whether the supply chain can be improved in the future still depends on the cooperation and repair of the international chip industry chain, and it is the essence of restoring the global industry chain cooperation.
(Proofreading/SKY)
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