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Huawei’s Mate 40 Doubles Chinese Content, by Replacing SDC OLEDs w/BOE OLEDs
Huawei response to U.S. sanctions banning American companies from selling to the company is to increase the use of China originated components in its latest smartphone. Nikkei, together with Tokyo-based research specialist Fomalhaut Techno Solutions, took apart 5G Huawei's Mate 40E, and found that Chinese-made parts account for roughly 60% of the total value of components -- twice as much as the Mate 30. Huawei remains reliant U.S.-made chips it has in stock, which is likely to cause the firm to fall even further behind rivals as time passes.
Fomalhaut estimated the manufacturing cost of the Mate 40E to be $367 -- virtually the same as the Mate 30, which went on the market in September 2019. The value of Chinese components was 56.6% in the Mate 40E, up from 30.0% previously.
The increase is mostly attributable to the OLED display made by China's BOE Technology Group that replaces Samsung Display panel. The component accounts for nearly 30% of the overall value of the smartphone.
Huawei used to have no option but to use Qualcomm chips. The teardown found the performance of the Kirin 990E chip -- designed by Huawei subsidiary HiSilicon and manufactured by Taiwan Semiconductor Manufacturing Co. -- equivalent to similar American chips. It was also used in the Mate 30. HiSilicon is also the source of the Mate 40E's antenna switch -- a communications chip -- as well as one of the power control chips. Other Chinese components include the fingerprint sensor and battery.
Fomalhaut Director Minatake Kashio said the teardown confirmed "further advances in self-production and procurement of homemade components" that Huawei embarked upon prior to the U.S. sanctions. Huawei has been shifting its procurement onshore as it runs down its U.S. inventory. American parts accounted for just 5.2% of the total value of the Mate 40E, but that was actually up from 2.6% in the Mate 30. There are six kinds of ICs produced by US chip makers in the new model compared to two in the old one.
The teardown found no American components compatible with 5G networks. But the Mate 40E has Qualcomm chips for core functions, such as processing communication ciphers. The device also contains a 4G semiconductor from Qorvo, a U.S. manufacturer. Kashio believes Huawei "possibly used U.S.-made chips it had procured and accumulated before the sanctions."
Since U.S. sanctions apply to Kirin chips from TSMC, Huawei will have to decide how fast it uses up its stock and where to find another source. The teardown revealed that 15.9% of Mate 40E components by value are Japanese made. This was a fall from 24.5% in the Mate 30 as a memory device produced by Kioxia, formerly Toshiba Memory, was replaced by a Samsung product. Components produced only by Japanese companies, include sensors and signal processing devices. The Mate 40E has an image sensor in its camera from Sony Group. The teardown identified components from other Japanese companies, including Murata, TDK, Taiyo Yuden and Asahi Kasei.
"If [Huawei] asks us to supply parts, we have to comply even under the U.S. sanctions," an official at a Japanese supplier told Nikkei. "There are even cases of executives asking directly. We will make shipments within an allowable range.
South Korean components made up 37.2% of the Mate 30, but this plunged to 11.5% in the Mate 40E, behind Chinese and Japanese parts. Due largely to the replacement pf the Samsung display.
Huawei response to U.S. sanctions banning American companies from selling to the company is to increase the use of China originated components in its latest smartphone. Nikkei, together with Tokyo-based research specialist Fomalhaut Techno Solutions, took apart 5G Huawei's Mate 40E, and found that Chinese-made parts account for roughly 60% of the total value of components -- twice as much as the Mate 30. Huawei remains reliant U.S.-made chips it has in stock, which is likely to cause the firm to fall even further behind rivals as time passes.
Fomalhaut estimated the manufacturing cost of the Mate 40E to be $367 -- virtually the same as the Mate 30, which went on the market in September 2019. The value of Chinese components was 56.6% in the Mate 40E, up from 30.0% previously.
The increase is mostly attributable to the OLED display made by China's BOE Technology Group that replaces Samsung Display panel. The component accounts for nearly 30% of the overall value of the smartphone.
Huawei used to have no option but to use Qualcomm chips. The teardown found the performance of the Kirin 990E chip -- designed by Huawei subsidiary HiSilicon and manufactured by Taiwan Semiconductor Manufacturing Co. -- equivalent to similar American chips. It was also used in the Mate 30. HiSilicon is also the source of the Mate 40E's antenna switch -- a communications chip -- as well as one of the power control chips. Other Chinese components include the fingerprint sensor and battery.
Fomalhaut Director Minatake Kashio said the teardown confirmed "further advances in self-production and procurement of homemade components" that Huawei embarked upon prior to the U.S. sanctions. Huawei has been shifting its procurement onshore as it runs down its U.S. inventory. American parts accounted for just 5.2% of the total value of the Mate 40E, but that was actually up from 2.6% in the Mate 30. There are six kinds of ICs produced by US chip makers in the new model compared to two in the old one.
The teardown found no American components compatible with 5G networks. But the Mate 40E has Qualcomm chips for core functions, such as processing communication ciphers. The device also contains a 4G semiconductor from Qorvo, a U.S. manufacturer. Kashio believes Huawei "possibly used U.S.-made chips it had procured and accumulated before the sanctions."
Since U.S. sanctions apply to Kirin chips from TSMC, Huawei will have to decide how fast it uses up its stock and where to find another source. The teardown revealed that 15.9% of Mate 40E components by value are Japanese made. This was a fall from 24.5% in the Mate 30 as a memory device produced by Kioxia, formerly Toshiba Memory, was replaced by a Samsung product. Components produced only by Japanese companies, include sensors and signal processing devices. The Mate 40E has an image sensor in its camera from Sony Group. The teardown identified components from other Japanese companies, including Murata, TDK, Taiyo Yuden and Asahi Kasei.
"If [Huawei] asks us to supply parts, we have to comply even under the U.S. sanctions," an official at a Japanese supplier told Nikkei. "There are even cases of executives asking directly. We will make shipments within an allowable range.
South Korean components made up 37.2% of the Mate 30, but this plunged to 11.5% in the Mate 40E, behind Chinese and Japanese parts. Due largely to the replacement pf the Samsung display.
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