[Tech Talk] Huawei Shock Threatens Qualcomm, Not Apple

Huawei Develops Own 5G Modem for New Smartphone
Previously Dominated by US Qualcomm... Apple Also Supplied
Achieves Independence from US-Dominated Mobile Communication Technology

Chinese telecommunications equipment company Huawei has sparked controversy by unveiling a state-of-the-art smartphone equipped with 7-nanometer (nm) semiconductors, overcoming stringent U.S. technology sanctions. Some voices express concern that Huawei could rise as a rival to Apple.

However, such claims are likely premature worries. In fact, the companies truly affected by the Huawei shock are different: the American telecommunications technology firms that have long dominated the mobile device market.

'Qualcomm Alliance' Dominating the Telecommunications Device Market with SoC, Modem, and RF Modules

Disassembly photos of the Huawei Mate 60 Pro. Huawei's latest modem is reported to have recorded speeds comparable to Qualcomm's current generation modem. If true, Huawei has nearly caught up with the US in SoC, 5G modem, and RFFE.
[Image source=Bloomberg YouTube]

The notable component in Huawei's latest smartphone, the Mate 60 Pro, is not just the 7nm chip. Huawei has incorporated its self-developed mobile station module for the first time in this product. This device could become a direct competitor to Qualcomm.

Whether smartphones or feature phones, all mobile phones include a mobile station. This component is essential for handling the phone’s data transmission functions.

The concept of the mobile station was first created by Qualcomm, a leading American telecommunications technology company. Today, Qualcomm’s mobile station modules, known as "Snapdragon," are essentially installed in all premium smartphones, including those from Apple and Samsung.

The mobile station is a highly sophisticated component. It is a solution that simultaneously provides complex functions such as radio frequency (RF) devices that capture fine radio waves, modems that convert analog signals to digital signals, as well as GPS and Bluetooth chips. Qualcomm connects this module to the SoC (system-on-chip), often called the brain of the smartphone, to further enhance performance.

Qualcomm, together with other American telecommunications companies, has formed a mobile station supply chain alliance. Qualcomm produces Snapdragon SoCs and modems, while telecommunications equipment manufacturers like Qorvo and Skyworks supply RF devices and antennas. Through this advanced division of labor, the "Qualcomm Alliance" has built market dominance that IT companies from other countries dare not challenge.

Huawei, Making 5G Modems Independently, Targets Qualcomm in China’s Domestic Market

Conceptual diagram of Qualcomm 5G modem-RF module mobile station. [Image source=Qualcomm]

However, the situation changed because of the Mate 60 Pro. The mobile station module in this Huawei phone integrates a 5G modem, high-quality RF antennas, and a considerable level of SoC, similar to Qualcomm’s modules.

Some analysts claim that Huawei’s module has recorded data transmission speeds equivalent to Qualcomm’s current-generation mobile station, the Snapdragon X70. If this claim is true, Huawei’s technology is only about 0.5 to 1 generation behind Qualcomm.

This level of technological gap is acceptable to general consumers, and more importantly, it means that Chinese smartphone manufacturers can now produce premium smartphones without relying on Qualcomm.

The newly released smartphone 'Mate60 Pro' is displayed at the Huawei store in Shanghai, China.
[Image source=EPA Yonhap News]

Earlier, the U.S. government announced in January this year that it was considering banning the export of Qualcomm modems to China. Even if new export restrictions do not materialize, Chinese manufacturers, uneasy about Qualcomm’s supply chain, will gradually prefer Huawei modems.

According to market research firm Counterpoint, China accounted for 67% of global smartphone production in 2021. Most of these manufacturers have relied on Qualcomm modems.

However, if Chinese companies, feeling supply chain insecurity, shift to using Chinese components at least for domestic products, it would be a huge blow to Qualcomm.

U.S. semiconductor market analysis group Semianalysis estimated on the 12th (local time) that Qualcomm’s potential lost revenue based on Chinese smartphone shipments could reach $7.6 billion (about 10 trillion KRW). This is about 17% of Qualcomm Group’s previous year revenue ($44.2 billion, approximately 58 trillion KRW).

Trade Sanctions Bring Action and Reaction... A Dilemma for Both China and the U.S.

The mobile station is not just a simple computer chip. It must integrate a radio frequency front-end (RFFE) module responsible for data transmission and reception, and these specialized components have been supplied to Qualcomm by specialized manufacturers such as Qorvo. [Image source=Qorvo]

Huawei’s new smartphone is unlikely to threaten the dominance of global manufacturers like Apple. However, it is significant in that it has laid the groundwork for China to seek "independence" in the mobile telecommunications technology market, which the U.S. has almost monopolized.

As long as the U.S. continues to restrict technology exports to China comprehensively, China’s semiconductor rise will not proceed as smoothly as before. But as shown by Huawei’s modem, China has sufficient capability to innovate continuously with its own technology.

Like the law of action and reaction, the more the U.S. tries to suppress China’s technology industry, the more persistent China will become in finding new paths. Ironically, the trade sanctions imposed by the U.S. to slow China’s technological progress may have actually accelerated China’s innovation pace.

Just as China struggles to secure stable chip supplies, the U.S., which is forming a technological containment around China, also faces a dilemma.

This content was produced with the assistance of AI translation services.