Huawei is seeking help from rivals, according tomedia reports. The company is in talks with MediaTek, the world’s second-largest mobile chip developer, and UNISOC, China’s second-largest mobile chip maker, to buy more chips as an alternative to stabilize the company’s consumer electronics business.
Developing its own cutting-edge chips has been an important strategy for Huawei to help it stand out in the global market for smartphones and other devices. Using rival chip products could hurt Huawei’s competitiveness, analysts and industry executives said.
MediaTek in Taiwan is a major mobile chip supplier to Samsung and Chinese smartphone makers OPPO, vivo and Xiaomi, as well as offering mobile chips for Huawei’s mid- and low-end 4G smartphones. Huawei also wants to sign a contract to buy MediaTek’s high-end 5G mobile chips, two people familiar with the matter said. Previously, Huawei used only in-house chips on its high-end handset line.
“Huawei has foreseen the day. Last year, the company began moving more low-end mobile chip projects closer to MediaTek,” said one person familiar with the matter. “
Another person familiar with the matter said MediaTek was still assessing whether it had enough human resources to fully support Huawei’s bid, which had more than three times the amount of normal purchases it had made in the past few years.
Huawei also wants to deepen its partnership with UNISOC, a Beijing-based mobile chip developer. The latter is aimed primarily at small equipment manufacturers and provides chips for entry-level products and devices in emerging markets. Previously, Huawei used UNISOC chips in only a small number of the company’s low-end smartphones and platform products.
“The new procurement deal will greatly boost UNISOC’s ability to further provide chip design capabilities,” said a chip industry executive. In the past, UNISOC has struggled because of the company’s difficulty in signing big contracts with the world’s leading smartphone makers. This may be a good opportunity for companies to try to keep up with international standards. “
Last year, UNISOC reportedly accelerated the development of 5G chips to catch up with Qualcomm and MediaTek. The Chinese mobile chip developer recently secured Rmb4.5bn ($630m) in financing from China’s National Integrated Circuit Fund, the China Integrated Circuit Fund, and is preparing to list on the SHANGHAI STAR technology board later this year.
Neither Mediatek nor UNISOC declined to comment.