Asia Business Channel

Huawei to sell its 4G chips on the open market to tap growing internet-of-things demand

 

HiSilicon, the in-house semiconductor and IC design company operated by Huawei Technologies, will begin selling its Balong 711 4G chip on the open market as demand for internet-backed solutions continues to surge. The Balong 711 4G chip was launched in 2014 more than 100 million chips have been shipped for use in Huawei and client products.

According to Huawei’s official WeChat account, the Balong 711 provides high-speed, reliable network connectivity for internet of things (IoT) applications including IoT products like surveillance cameras, vending machines and smart lockers that require stable Internet connections to function.

Analysts expect that Huawei’s chip will fierce competition in the market from rival chipmakers such as US-based Qualcomm and Taiwan’s MediaTek, since both of these companies have similar 4G chips and the market for IoT chips is already mature.

HiSilicon is a “fabless” chip company that relies on independent wafer foundries like Taiwan Semiconductor Manufacturing Co (TSMC) to fabricate their chip designs onto silicon. HiSilicon’s competitors, MediaTek and Qualcomm also use the “fabless” business model, outsourcing their chip production to other companies.

One analyst said that HiSilicon’s decision to sell its 4G chip, “Suggests that Huawei might adopt the strategy of selling older versions of its chips on the open market,” and that the company could start selling its Balong 5000 – multi-mode chip that supports networks from 2G to 5G, in 2020, as wider 5G commercialization is underway.

Huawei was blacklisted by the Trump administration in May as part of the US-China Trade Wars, and since that time, the privately owned company has increased its strategic investments and added thousands of researchers in a bid to counter the US ban. The company plans to continue to use chips from US vendors, including Qualcomm, even though the Chinese company is able to realize self-sufficiency through its own designs and supplies.

US technology companies that to sell their products to Chinese companies on Washington’s Entity List need to apply for an exemption from the ban. Recent reports suggest some approvals will soon be granted related to Huawei, since the company spent more than $11 billion USD buying US components in 2018.

 

 

 

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