Qualcomm will lose 60 million chip orders next year
Huawei Breaks Through Sanctions: Qualcomm will lose 60 million chip orders next year
Huawei Breaks Through Sanctions: Qualcomm will lose 60 million chip orders next year.
The US sanctions may have pushed Huawei’s smartphone business to the brink, but the Chinese company is still persevering and managed to circumvent these trade restrictions by producing the Kirin 9000S, which is its custom SoC that was applied to the newly released Mate 60 Pro 5G after a brief hiatus.
Although the Kirin 9000S is not the most capable chipset when it comes to performance and efficiency comparisons, its birth marks Huawei’s intention to no longer rely on companies like Qualcomm in the future, and according to an analyst, Qualcomm may lose billions of dollars because of this new chip.
Despite being under trade sanctions, Huawei is still one of Qualcomm’s largest customers, with chip purchases of 23 million to 25 million units in 2022 and 40 million to 42 million units in 2023.
At least according to analyst Ming-Chi Kuo, the Chinese company will fully adopt Kirin chipsets in 2024, which means that Qualcomm’s shipments will decrease by about 50 million to 60 million units next year, which will greatly discount its revenue source for the entire 2024.
Let’s estimate, assuming that each of these shipments is a Snapdragon 8 Gen 3, with a cost of $180 per SoC, then Qualcomm may lose $10.8 billion in revenue next year. It is not clear yet whether Huawei plans to offer the Kirin 9000S to more Chinese device brands next year, but if Huawei intends to offer it, its cost may be lower than Qualcomm’s own products.
Kuo said in the report that in order to cope with the decline in chip sales, Qualcomm is likely to start a price war as early as the fourth quarter of 2023 to maintain its strong market share in the region, but this will come at the expense of its annual profit. Another lurking danger is Samsung’s upcoming Exynos 2400, which is said to appear in several markets where the Galaxy S24 series sells.
If things weren’t bad enough, Kuo also pointed out that Apple is said to launch a 5G modem in 2025, so Qualcomm‘s baseband chip sales may further decline in two years.
Anyway, this San Diego-based company must make some decisions within a few months, otherwise it will face the risk of losing money every quarter in the near future.
