Shulou(Shulou.com)05/31 Report--

No company has ever done what HiSilicon, Huawei's chip design arm without a fab, has done. Successfully become one of the top ten semiconductor sales companies in the world. The division's total revenue in the first quarter was $2.67 billion, five places higher than the semiconductor revenue of $1.74 billion in the same period last year. A year-on-year increase of 54%.

Huawei and TSMC, a top foundry company, need each other.

The company's chips are made by TSMC, and Huawei has become the second-largest contract manufacturing customer after Apple. Last year, they accounted for 37 per cent of TSMC's sales. As early as 2017, Huawei accounted for only 5 per cent of TSMC's annual sales, rising to 8 per cent in 2018 and 14 per cent last year.

90% of sea lion's sales are sold to Huawei. As we have mentioned many times, the government has drafted rules, which could cause trouble for manufacturers. Now, if foreign products in production contain more than 25% of products, exports can be controlled. At this level, chips from the TSMC assembly line are not available, but if the threshold is lowered to 10 per cent (the government has been considering it), TSMC may not be allowed to ship chips to Huawei.

Although Huawei has moved some of its business to SMIC, the largest contract manufacturer, the fact is that SMIC is just a few process nodes behind TSMC. This limits the use of SMIC chips in low-and middle-end mobile phones. TSMC is expected to start producing 5nm chips for Huawei this year to power the Mate 40 series, which is expected to be launched this autumn. SMIC is producing 14-nanometer chips for its silicon wafers. At that process node, the chip has 28.88 million transistors per square millimeter. 5 nanometer chips compress 171.3 million transistors per square millimeter. The more transistors in an integrated circuit, the higher their power and energy efficiency.

The data show the importance of TSMC to Huawei and vice versa. There are not many wafer factories that can produce 5 nm chips. Apart from TSMC, Samsung is the only company that plans to release 5nm components this year. Intel is already talking about regaining the technology leadership of TSMC and Sami. Currently, Intel produces 10 nm Binghu-U mobile processors. A few months ago, Intel CEO Bob Swan said, "We are accelerating the introduction of process nodes and returning to the pace of two to two and a half years. Our process technology and design engineering teams are working closely together to simplify the process. Design complexity, balancing schedule, performance, power consumption and cost."

Speaking of Intel, it is the world's largest semiconductor company, with first-quarter sales of $19.5 billion, up 23% from the same period last year. Samsung ranked second. Semiconductor revenue rose 15% to $14.8 billion in the three months to march. After Hayes, TSMC ranked third, while semiconductor revenue grew 45 per cent year-on-year. TSMC's revenue for the quarter was $10.3 billion.

SK Hynix, a South Korean-based chipmaker responsible for RAM memory chips on iPhone, reported that its first-quarter revenue remained unchanged at just over $6 billion. Fourth place is enough. Among the top 10, Micron had the largest year-on-year decline in revenue (- 12%), ranking fifth. Once you know that Huawei is its biggest customer, it makes sense. Qualcomm's chips are also made by TSMC, with first-quarter revenue of $4.1 billion, up 8 per cent from a year earlier. This puts Snapdragon chip designer seventh in the top 10 behind Broadcom.

The remaining names on the list include Nvidia (also on the list for the first time) and Texas Instruments. As we have already pointed out, the sea lion ranks tenth. The top 10 companies reported a 16% increase in total revenue in the first quarter to $72.5 billion. This is more than double the 7% growth rate reported in the top 10 in the first quarter of last year.

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