Huawei shines in spotlight, but optimism amid US sanctions remains premature

Jay Liu, Taipei; Jingyue Hsiao, DIGITIMES Asia 0


Huawei was put into the spotlight after it launched the Mate 60 Pro powered by a secretive SMIC-made SoC. However, it is too early to be optimistic about Huawei's breakthrough from US sanctions.

Views differ on whether the Mate 60 Pro is Huawei's comeback in the smartphone market or is more of an experimental product. The smartphone is largely expected to put pressure on Qualcomm, MediaTek, and Apple.

Some analysts revised their estimation of the Mate 60 Pro shipments from 12 million to 15–17 million units due to reports of an upward adjustment in production target from the supply chain. Furthermore, after the Mate 60 Pro, Huawei unveiled the Mate 60 Pro+, an upgraded version of the Mate 60 Pro, and a foldable phone, Mate X5, on its online mall without disclosing detailed information about the SoCs.

The Mate 60 Pro, featuring Kirin 9000s and priced at CNY7,000 (US$953), is not competitive in price and performance compared to other smartphones at similar prices powered by APs, such as Snapdragon 8 Gen1+. Consumers can buy an iPhone 14 Pro for an additional CNY1,000–2,000. Applications have yet to undergo optimization with the Mate 60 Pro, which makes it difficult for the smartphone to be positioned as a high-end smartphone and compete in the flagship segment.

The enthusiastic pre-ordering seen so far can be attributed to Huawei's marketing strategy, patriotism in China, and consumers' trust in Huawei's brand. Whether the fervent sentiment can go through the test amid weak demands in the smartphone market has to be seen.

Meanwhile, SMIC's yield for its N+1 and N+2 nodes remains a secret, as there is an evenly divided opinion on whether SMIC's yields for the advanced nodes are more than 50%. Whether SMIC can ship 12 million or higher SoCs based on the nodes also remains to be seen.

Experts familiar with the mobile SoC industry pointed out that if Huawei returns to the forefront of the smartphone market, the most significant impact will be felt by other China-based brands for high-end smartphones and Qualcomm, a major SoC supplier for these smartphones.

However, it is to note that the outlook for smartphone sales in 2023 is challenging to expect substantial growth in China. On a global scale, Huawei's annual shipments of less than 20 million units are insufficient to disrupt the market. Therefore, it is too early to draw optimistic conclusions about Huawei's comeback.