Trade tensions between China and the United States may level up with China’s new restrictions on Apple, Qualcomm and other US companies. According to Business Insider, if the cell phone production chain continues to segment, international launches can be strongly impacted or even paralyzed.
After having its component supply by TSMC ended this Monday (18), Huawei will have to relocate its manufacturing to Semiconductor Manufacturing International Corporation (SMIC), a Chinese semiconductor manufacturer – which has already received more than $ 2.3 billion in Chinese investments for the development of its own production.
Last week, the Chinese state vehicle Global Times revealed that the local government was ready to retaliate against the US government by adding companies from the country to the list of “untrusted entities” – subjecting them to “endless investigations”. Despite not realizing its threats, the U.S. government upheld its decisions and caused TSMC to cease negotiations with Huawei.
SMIC, therefore, would be a viable alternative for Huawei. Currently, the semiconductor manufacturer is already responsible for producing the Kirin 710A, the Chinese entry processor, but has not yet been able to achieve 5 nm lithography for the production of more advanced chips, points out The Verge.
This deficiency could significantly impact the quality of Huawei phones and further decrease its international reach. Not only that, but segmentation can propel other countries to choose sides in the trade war, resulting in the fall of business for all manufacturers in the world.
Thus, the consumption pattern in the mobile market may become increasingly dependent on the manufacturing alignment in that country. Generating a loss in gains from international launches and less availability of global models.