Unveiling Huawei Kirin 9000S: Challenging the Dominance of Qualcomm's Chipset

The Emergence of Huawei Kirin 9000S: A Threat to Qualcomm's Chipset Supremacy

Before the U.S. sanctions, Huawei was on the verge of overtaking Samsung in terms of market share. However, after the sanctions, Huawei faced significant challenges. But with the introduction of the Huawei Kirin 9000S, the Chinese company has managed to overcome trade limitations.

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The Huawei Kirin 9000S is the latest custom System on a Chip (SoC) that powers the newly released Huawei Mate 60 Pro 5G. This marks Huawei's entry into the 5G smartphone market, indicating its intention to reduce reliance on Qualcomm in the future.

Huawei Kirin 9000S Shakes Qualcomm's Position

Following the U.S. sanctions, Huawei had to resort to using 4G chipsets for its phones. In 2023, the Chinese brand purchased around 42 million chipsets from Qualcomm. However, with the adoption of the Kirin 9000S and other Kirin SoCs in 2024, Qualcomm's market share in China is under threat.

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According to industry analyst Ming-Chi Kuo, Qualcomm could potentially lose around 60 million chipset orders due to Huawei's adoption of the Kirin 9000S and other Kirin chips in the next year. This could result in a significant decline in Qualcomm's revenue for 2024.

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It's worth noting that Qualcomm's chipsets are priced higher than the competition. For instance, the Snapdragon 8 Gen 2 costs £160 per unit, and the upcoming Snapdragon 8 Gen 3 is expected to have an even higher price tag.

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Even with the assumption that Huawei planned to use the 4G version of the Snapdragon 8 Gen 3, each SoC would still cost around £180. With an estimated decline of 60 million orders, Qualcomm could potentially face a loss exceeding £10.8 billion. Furthermore, Qualcomm's position in the Chinese market may weaken if other Chinese manufacturers follow Huawei's lead in adopting the Kirin 9000S.

Qualcomm's Response: A Price War?

Ming-Chi Kuo suggests that Qualcomm will likely engage in a price war to maintain its market share in China. This price war could potentially start in Q4 2023. However, engaging in a price war might impact Qualcomm's annual profits significantly.

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But Huawei Kirin 9000S is not the only concern for Qualcomm. Samsung's Exynos 2400, set to be featured in the upcoming Samsung Galaxy S24 lineup, poses another threat. However, the availability of phones with Exynos chipsets will be limited to certain regions. Additionally, Apple plans to introduce its 5G modem in 2025, which could further impact Qualcomm's baseband chip sales.

In summary, Qualcomm faces critical decisions in the coming months with the advent of Huawei Kirin 9000S and other competing solutions. Failure to strategize effectively may result in continuous quarterly losses for the San Diego-based company.