Apple’s Woes in China Persist as Huawei Makes Huge Chip Breakthrough

Apple’s Woes in China Persist as Huawei Makes Huge Chip Breakthrough

Another threat may just have added to the number of issues that Apple Inc (NASDAQ: APPL) currently faces in China. Despite the pertinent geopolitical and economic threats to its existence in the region, the giant tech firm now faces an additional challenge from a resurgent Huawei. That is because China’s biggest semiconductor manufacturer SMIC has made a remarkable breakthrough by producing a chip for the smartphone maker.

Meanwhile, it might be worth mentioning that US sanctions are currently in effect. So, by implication, China is not expected to have access to critical technologies at this time.

Nonetheless, the situation has raised concerns in Washington, according to a CNBC report. While some continue to ask questions related to how it was even possible for SMIC to manufacture the chip, others are not exactly sure that these new chips are being manufactured as effectively as they should if Huawei is to stage a real comeback.

Why the Fuss About Huawei’s New Chip?

Aside from the popular Apple and Samsung brands, Huawei is probably one of the few other companies that has designed its smartphone processor.

But before now, Taiwan Semiconductor Manufacturing Co (TSMC) was helping it manufacture its chips. Following US sanctions on exports, however, Huawei could no longer access American technology anywhere along the lines of chipmaking. From 2019 to date, the US government has issued several sanctions that effectively cut off Huawei from key technologies including 5G chips, Google Licensed Apps, and others.

For what it’s worth, those US restrictions almost wiped out Huawei’s smartphone business. So it became important for the Chinese company to source its chips from somewhere else.

While the TSMC is arguably the world leader when it comes to chipmaking, Huawei had to look inward to SMIC for its new chip.

Interestingly, when Huawei quietly unveiled the Mate 60 Pro in China this month, analysis showed a chip inside that was made by SMIC.

What It Means for Apple and Its Destiny in China

Without a doubt, there is already a strained relationship between the US and China at the moment, but Apple may just be one of its biggest losers. In early September, the Wall Street Journal reported that China had banned its central government staffers from using Apple’s iPhones and other foreign-branded phones for work. As a fact, the report also suggested that workers may not even bring such phones into the office.

Although China’s Ministry of Foreign Affairs has denied any such prohibitions on the use of foreign phones,  a potential Huawei resurgence poses the biggest competitive threat to Apple.


Apple’s Woes in China Persist as Huawei Makes Huge Chip Breakthrough

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