Huawei’s self-research chip shares a record high behind: strategic-level transformation to replace Qualcomm with Kirin

In the third quarter of last year, Huawei’s use of self-developed chips in mobile phones increased, reducing Qualcomm’s share of Huawei’s handsets from 24 per cent to 8.6 per cent, according to a new report by IHS Markit, a market research firm. Huawei used its Kirin range in 74.6 percent of its smartphones in the third quarter of last year, up from 68.7 percent a year earlier, the report showed.

“Samsung and Huawei are taking strategic steps to realign their smartphone product lines and supply chains from third-party processor solutions to self-developed alternatives,” Gerrit Schneemann, senior analyst at IHS Markit Smartphones, said in a statement. Each company has its own unique reasons for change. ”

Huawei's self-research chip shares a record high behind: strategic-level transformation to replace Qualcomm with Kirin

IHS Markit said Huawei’s increased use of self-research chips was due to the company’s expansion of its use of Kirin chips. Previously, the company’s Kirin chips were mainly used on flagship devices, but now they are also used on mid-range models.

Qualcomm’s share of Huawei shipments fell from 24 percent in the third quarter of 2018 to 8.6 percent in the third quarter of 2019, according to IHS Markit. By contrast, MediaTek increased its share of Huawei’s handsets to 16.7 per cent in the third quarter of last year, up from 7.3 per cent in the same period in 2018.

However, Both Qualcomm and MediaTek are trying to maintain and expand their market share. As brands such as Xiaomi, OPPO and Vivo become major customers of the two companies, the competition between them has become more and more intense.

In the third quarter of 2019, Qualcomm maintained its market share of 31% in the global mobile processor market, followed by MediaTek with 21% of the market, while Samsung Exynos and Huawei Kirin had 16% and 14% respectively.

In addition to Huawei, Samsung has also increased its use of its own chipsets in its products to reduce its reliance on third-party suppliers.

In the third quarter of 2019, Samsung used its Exynos processor in about 80.4 percent of its mid-range smartphones, up from 64.2 percent in 2018, according to IHS Markit. Of the entire smartphone product line, 75.4 percent of smartphones are equipped with Exynos processors, up from 61.4 percent in the same period in 2018.

In the third quarter of 2019, Huawei and Samsung’s internal chipset shipments increased by more than 30% year-on-year, the report showed. Over the same period, Qualcomm’s market share fell by 16.1%.