Qualcomm’s market share of China’s smartphone chip market fell to 25.4% in 2020 from 37.9% in 2019 while shipments shrank 48.1%, according to CNBC. The so-called system on chips (SOC) smartphones shipped in China was 307 million, down 20.8% year-on-year.
- Qualcomm’s market share decline and fall in chip shipments were mainly caused by U.S sanctions on Huawei.
- Huawei sanctions allowed domestic mobile players to turn to alternatives such as MediaTek, which gained a dominant share in the country.
- Huawei was put on a U.S blacklist known as the Entity List in 2019, which restricted American firms, including Qualcomm, from exporting components.
- Following the sanctions, Huawei ramped up its chip division called HiSilicon with its high-end devices using Kirin chips, designed by Huawei and manufactured by Taiwan’s TSMC.
- Taiwan’s MediaTek benefited from pent-up demand, taking advantage of Huawei and Qualcomm woes to get major Chinese smartphone makers to use its chips.
- Qualcomm is projected to take the share away from MediaTek in the fast-growing 5G smartphone segment in China given its launch of 6 and 4 series of 5G chipset.
Qualcomm and MediaTek stocks are currently gaining. QCOM: NASDAQ is up 0.85% on premarket, 2454: TPE is up 7.11%
