According to one of the sources and a third source acquainted with the industry supply chain, shipments to surveillance camera makers from the company’s HiSilicon chip design section began this year. According to one of the persons informed on the unit, at least some of the consumers are Chinese.
Huawei has also launched new handsets in recent weeks that employ powerful technology that analysts claim is built in China. The moves suggest that the Chinese tech behemoth is circumventing Washington’s export rules, which have banned it from purchasing components and technology from U.S. enterprises without prior approval since 2019.
“These surveillance chips are relatively easy to manufacture compared to smartphone processors,” said a person acquainted with the supply chain of the surveillance camera sector, adding that HiSilicon’s return will shake up the market.
One important factor is that the corporation appears to have circumvented US limits on semiconductor design software. Huawei revealed in March that it had made advances in design tools for chips produced at and above 14 nanometres – two to three generations below cutting-edge technology, but a significant step forward for the company.
HiSilicon primarily sells semiconductors for Huawei equipment, but it also has customers outside of Huawei, including Dahua Technology (002236.SZ) and Hikvision (002415.SZ). It was the major semiconductor provider to the surveillance camera business prior to US export limits, with brokerage Southwest Securities estimating its global share in 2018 at 60%.
According to Frost & Sullivan estimates, HiSilicon’s global market share would have dropped to 3.9% by 2021.
According to one person briefed on the unit’s operations, HiSilicon has deployed some low-end surveillance chips since 2019, but its focus is on the high-end arena and regaining market share from Taiwan’s Novatek Microelectronics Corp (3034.TW).
Because of the sensitivity of the subject, all three sources declined to be identified.
Huawei did not respond to a request for comment.
Huawei gained notice in late August when it released the Mate 60 Pro, a new smartphone with an innovative technology that users claimed could reach 5G speeds. The occasion was hailed by Chinese state media and the general public as a triumph for Huawei’s smartphone industry, which had been hobbled by US sanctions.
TechInsights studied the Mate 60 Pro and discovered that it was powered by a new Kirin 9000S, a sophisticated chip made in China by China’s premier chip foundry, Semiconductor Manufacturing International Corp (SMIC) (0981.HK).
Huawei has not commented on the phone’s 5G capabilities or how the sophisticated processor was created. HiSilicon has historically designed the Kirin series, and prior to the US sanctions, Huawei collaborated with Taiwan’s TSMC (2330.TW) to manufacture it.
Following the launch, US legislators called for further pressure and “more effective export controls” on Huawei and China’s leading chip foundry, Semiconductor Manufacturing International Corp (SMIC) (0981.HK).
The US has no evidence that Huawei can mass-produce smartphones with sophisticated technology, according to US Commerce Secretary Gina Raimondo on Tuesday.
HiSilicon’s access to electronic design automation (EDA) software from Cadence Design Systems Inc (CDNS.O), Synopsys Inc (SNPS.O), and Siemens AG’s (SIEGn.DE) Mentor Graphics has been hampered by US sanctions. The products of the three corporations dominate the chip-design sector, which creates blueprints for semiconductors before they are mass-produced.
Analyst Dan Hutcheson of TechInsights stated that their research of the Mate 60 Pro and other components like its radio frequency power chip indicated that Huawei has access to sophisticated EDA tools that “they are not supposed to have.”
“We don’t know if they got them illicitly, or more probably the Chinese developed their own EDA tools,” he explained.