Samsung unveils its first 5G integrated chipset for smartphones

Samsung Electronics introduced Exynos 980, its first 5G integrated mobile chipset for the mainstream market. Mass production will start by the end of the year.

Samsung’s 5G devices have so far been using separate modem and APE solutions, including its own Exynos 9820 and Qualcomm’s Snapdragon 855 chipsets teamed up with the Exynos 5100 and Snapdragon X50 modems. The new 5G integrated chipset announced today is Samsung’s first. With an 8nm footprint, the chipset combines the 5G modem and APE processors using 8nm FinFET process.

“With the introduction of our 5G modem last year, Samsung has been driving in the 5G revolution and paved the way towards the next step in mobility,” said Ben Hur, VP of System LSI marketing at Samsung Electronics. “With the 5G-integrated Exynos 980, Samsung is pushing to make 5G more accessible to a wider range of users and continues to lead innovation in the mobile 5G market.”

The chipset’s key specifications include:

  • Modem: supports 5G NR Sub-6GHz with max 2.55Gbps downlink and 1.28Gbps uplink speeds. It is also backward compatible with LTE, 3G, and 2G.
  • CPU: one 2.2GHz Dual-core based on Cortex-A77, and one set of 1.8GHz Hexa-core based on Cortex-A55. It may be worth noting that Samsung’s high-end Exynos 9820 can go up to a max speed of 2.73 GHz.
  • Camera support: single-camera up to 108Mp, or dual-camera 20MP+20MP. Samsung also stresses the integrated AI capability to support photo taking.
  • Video support: 4K UHD 120fps encoding and decoding with HEVC(H.265), H.264, VP9

Samsung said in the announcement that the mass production of Exynos 980 is expected to start by the end of this year, indicating Samsung 5G smartphones and tablets based on this new chipset will hit the market in the first half of 2020, if not the first quarter.

One day earlier, Samsung announced Galaxy A90 5G, a mid-range 5G smartphone, based on Qualcomm’s Snapdragon 855 platform, which is aimed at taking 5G to the mainstream users. The new Exynos 980 is likely to power the next generation of mid-range devices.

The 5G momentum in South Korea, Samsung’s home market, has been going strong. After registering 1 million subscribers by the beginning of June, government data showed that by the end of July the total number of 5G subscribers, from all three operators combined, already topped 2 million.

Here is Exynos 980’s promotion video:

 

Opportunities and challenges as eSIM technology is primed for take-off

Telecoms.com periodically invites third parties to share their views on the industry’s most pressing issues. In this piece Yuval Mayron, General Manager, IoT at Amdocs, takes a look at the business environment created by the mainstream adoption of eSIM technology.

When Apple declared in September that its handsets would have eSIM capabilities, the technology was still in its infancy. Widespread adoption was still someway off, but it’s integration into the iPhone X as part of a dual-SIM function was a clear indication of the significant role it would play in the next generation of mobile technology.

The eSIM incursion

Unlike its predecessor, eSIM is built into the mobile handset, part of a global specification from the GSMA that enables remote SIM provision for any device.

Although most smartphones do still have a physical SIM slot, eSIM is already taking hold. The latest models of the iPhone and Google Pixel have eSIM capabilities, for example.

However, it’s not just the smartphone market that will be bolstered by the arrival of eSIM. The technology is set to be a key growth driver for the Internet of Things (IoT). Consumer devices, which require always-on connectivity, such as wearables (e.g. Apple Watch or Fitbit), connected home devices (e.g. Amazon Echo), laptops and tablets, will all reap the rewards of eSIM and its ability to connect consumer and enterprise IoT devices.

eSIM will transform the mobile ecosystem, and widespread adoption of the technology will have significant ramifications for many of the industries stakeholders.

Consumers, the enterprise, CSPs and suppliers – the eSIM beneficiaries

According to the GSMA, eSIM is expected to create $8.96 billion in revenues by 2020. With this figure in mind, it’s understandable that stakeholders in the industry are jostling for a slice of the eSIM pie.

Amongst those to benefit most from the technology’s introduction are consumers and communication service providers (CSPs), but eSIM will also present opportunities for the enterprise and suppliers too.

Consumers

eSIM enables users to download multiple digital profiles (up to eight at any given time) from the cloud, directly onto their device; empowering subscribers to switch operators with unprecedented ease.

As eSIM enables subscribers to connect more devices, operators can offer multi-device packages and bespoke data plans. With eSIM, device bundling will become much easier, and consumers will be able to conveniently add new devices to their plans without having to enter a shop or wait for a physical SIM card to arrive in the post. Ultimately, consumers will benefit from reduced costs and enhanced customer experience through simplified device setup.

The enterprise

Businesses are set to profit from the convenience of eSIM too; adding new phones to a corporate mobile service and swapping devices between users with ease. The technology will also enable enterprises to offer personalised profiles and data plans for each user, which can be adjusted and optimised via eSIM remote management tools, depending on the individual needs of the employee.

Furthermore, any business that relies on IoT systems is likely to profit from the cost saving benefits of eSIM. Enterprises can remotely connect equipment to a mobile network using eSIM, which uses less space and is cheaper than traditional SIM technology. Consequently, mobile connectivity can be integrated into hardware where it was previously not feasible due to cost and space restrictions. This will be particularly useful to large-scale machine-to-machine deployments such as manufacturing and warehousing facilities, oil and gas, or power plants.

CSPs

The increase in multi-device packages, enabled by consumer and enterprise adoption of eSIM, should also present new revenue opportunities for mobile operators as customers scale-up their plans by adding new data-centric devices.

In fact, the opportunity for CSPs is tremendous. With the growing proliferation of smart devices across every consumer and business market, the demand for mobile, wireless connections will skyrocket. These opportunities will only be augmented by the arrival of 5G, which is yet to realise its full potential.

Manufacturers and suppliers

On the face of it, the arrival of the new eSIM standard should spell the end for the manufacturers and suppliers of SIM cards, with the physical SIM all but obsolete. However, eSIM, combined with the momentum behind connected devices, opens up a number of exciting and untapped markets.

Each new device and future innovation in the connected devices space is, in theory, primed for eSIM technology and ripe with opportunity for manufacturers and suppliers. It’s all about supply and demand, after all.

eSIM adoption – the business and technology challenges

Despite the rosy picture that eSIM presents, there remain a number of practical business and technology challenges which need to be addressed by CSPs before it can realise its full potential.

The new eSIM customer experience is complicated by the fact that each original equipment manufacturer (OEM) has its own proprietary processes and screens. Onboarding these, as well as BSS integration and modification, is convoluted, and new protocols, processes, integrations and certifications will be required.

There may also be challenges when troubleshooting eSIM-enabled devices. Call centre support agents are not currently able to analyse profile download issue for all eSIM-enabled devices from one screen and will therefore not be able to perform proactive corrective actions.

These issues could be further complicated by the need for integration with other ecosystem players, such as retailers, point of sale, channels and roaming, which will each require its own solution.

Overcoming the eSIM challenge

eSIM represents a seismic shift in the way the mobile ecosystem operates, so it’s only natural that there will be some teething problems before the technology is up and running smoothly.

For eSIM to succeed, operators need to develop a solution that enables a simple and intuitive customer experience, with seamless support for all functionalities and capabilities that we’ve come to expect from the latest generation of connected devices. This will only be possible if call centre and customer service agents have visibility of devices and control from a single screen.

The other issue is that of compatibility and integration. CSPs need a solution that will work in tandem with the full range of eSIM-enabled devices along with billing systems that work with all the relevant players and platforms in the ecosystem.

Achieving such capabilities is a complex undertaking, which will almost certainly require a specific enabler. This will likely be in the form of an eSIM cloud solution, which would allow integration to all device OEMs and services providers, enabling a one-time integration, and eliminating the need to integrate hundreds of times with all the different players.

This will result in a unified experience in eSIM lifecycle management, for every device type, every OEM, channel, and location, effectively and seamlessly managing settlement among all ecosystem stakeholders.

With a cloud solution in place, eSIM technology could finally be primed for take-off.

Qualcomm makes its Wi-Fi 6 move

Mobile chip giant Qualcomm wants a bigger piece of the wifi action and reckons the advent of the next generation of technology is a good opportunity to grab it.

At a recent event in San Francisco devoted entirely to Wi-Fi 6, Qualcomm launched a family of Wi-Fi 6 platforms branded the Networking Pro Series. There are four platforms, to be precise, named 1200, 800, 600, and 400, that are distinguished as follows:

qualcomm wifi 6 products

Qualcomm has been banging on about Wi-Fi 6 (or 802.11ax as it was known before the Wi-Fi Alliance belatedly saw sense on nomenclature), for years, so this move is no great surprise. The big improvement isn’t so much about data rates but the number of devices a given router can support – i.e. capacity, as well as a bunch of other less obvious enhancements.

“Wi-Fi 6 is a transformational reimagining of how Wi-Fi works, a leap forward arriving alongside 5G and designed to accommodate the massive surge of connected devices,” said Nick Kucharewski, GM of wireless infrastructure and networking at Qualcomm. “The Qualcomm Networking Pro Series platforms raise the bar for the management of the ever-growing number of connected devices, the variation and complexity of those devices’ data needs, and the quality of the overall connectivity experiences they deliver.”

“The transformative nature of Wi-Fi 6 will have a deep impact across all categories of connected devices and environments,” said Edgar Figueroa, CEO of the Wi-Fi Alliance. “We’re going to witness dynamic changes in Wi-Fi with the inclusion of advanced features in Wi-Fi 6 which will drive improved network capacity, better performance and increased speeds.”

As well as potentially helping it grab wifi router market share from the likes of Broadcom and Cisco, Qualcomm reckons its focus on Wi-Fi 6 can help it in other markets such as connected car and IoT. It could also do a lot to proliferate the mesh technology that Qualcomm has also been very keen to promote.

Huawei claims AI leadership with launch of Ascend 910 chip and MindSpore

Networking giant Huawei reckons the new Ascend 910 is the world’s most powerful AI processor.

The chip was launched alongside ‘an all-scenario AI computing framework’ called MindSpore at an event positioned as the realisation of the AI strategy announced in October of last year. “Everything is moving forward according to plan, from R&D to product launch,” said Huawei Rotating Chairman Eric Xu. “We promised a full-stack, all-scenario AI portfolio. And today we delivered, with the release of Ascend 910 and MindSpore. This also marks a new stage in Huawei’s AI strategy.”

Huawei chucked around a few datapoints involving things like Teraflops, to support its claim that the Ascend 910 kicks AI ass. It also consumes around 10% less power than Huawei had previously expected it to. “Ascend 910 performs much better than we expected,” said Xu. “Without a doubt, it has more computing power than any other AI processor in the world.”

MindSpore is not the omniscient, Skynet-like AI platform implied by the slightly creepy name, but an AI development platform. Among its priorities are flexibility, security and privacy protection and it’s designed to be used to develop AI stuff across both devices and the cloud.

For obvious reasons anything Huawei announces these days features liberal references to the importance of security and privacy. “MindSpore will go open source in the first quarter of 2020,” said Xu. “We want to drive broader AI adoption and help developers do what they do best.”

At the same event Xu reportedly addressed the impact of all the US aggro on its bottom line. Referring specifically to the consumer business unit Xu said he’s optimistic it won’t be as badly affected as previously feared, but that the impact of US sanctions could still be as much as $10 billion in revenue.

Skyworks financials reveal the cost of working with Huawei

Mobile chip maker Skyworks solutions has released its financial results for the third quarter of 2019, with a $127 million hole in comparison to the same period of 2018.

In most circumstances, a 16% drop in revenues for a three-month period would send the office into meltdown. Executives and shareholders will of course not be thrilled, but this downturn was expected by pretty much everyone involved; this is the cost of doing business with Huawei.

As you can see from the table below, there are certainly some numbers which will cause a persistent twitch.

Q3 2019 Q2 2018
Net revenue $767 million $894.3 million
Gross profit $312.5 million $442.7 million
Net income $144.1 million $286.5 million
Earnings per share (Basic) $0.83 $1.58

What is worth noting is that there are factors contributing to this downturn outside the Huawei saga. Semiconductor sales across the world are in a trough currently, the Semiconductor Industry Association (SIA) unveiled quarterly figures earlier this week, with the global smartphone shipments impacting financials everywhere.

Perhaps due to a lack of innovation in the smartphone arena or consumers afraid of purchasing new devices with a new ‘G’ on the horizon, shipments have declined. History suggests this is cycler, though the depressed states of affairs can also be contributed to Huawei business.

Skyworks solutions is one of those businesses which is in a somewhat difficult position. There might a brief reprieve for those working with Huawei, though the damage has clearly been done.

In entering Huawei onto the Entity List, effectively banning any US company from working with the Chinese vendor, President Trump released a wave of collateral damage. Skyworks was not one of the worst effected, though as you can see there clearly is friendly fire from the White House.

During last years Annual Report, Skyworks told investors Huawei was one of three firms which accounted for more than 10% of annual revenues. With a third of generated revenues being attributed to three companies, this is not the healthiest position, but in the smartphone segment it is largely unavoidable; there aren’t than many manufacturers after all.

Interestingly enough, while the firm did beat market expectations, this does not seem to have diluted fears from investors.

The management team has greenlit a 16% increase of dividend payments, while there is hope it might be able to continue work with Huawei, but investors are seemingly voting with their feet. At the time of writing, share price declined by almost 7.4% in overnight trading.

This is not a firm which will cease to exist because of these negative events, however it is wounded right now. Huawei is a massive customer for the team and an account which was only getting more profitable as Huawei grew its global smartphone market share. This is not the beginning of the end, but it doesn’t make for the most comfortable reading.

The calm before the storm – semiconductor sales plummet in Q2

Data from the Semiconductor Industry Association (SIA) show semiconductor sales are hitting depressing levels, though history suggests this might be the fast before the feast.

The SIA statistics suggest worldwide sales of semiconductors reached $98.2 billion during the second quarter of 2019, a minor increase on Q1 (0.3%), but a massive 16.8% crash on the same period of 2018. Cumulatively, year-to-date shipments during the first half of 2019 were 14.5% lower than through to the same point in 2018.

“At the midpoint of 2019, the global semiconductor market remains in a period of decreased sales, with revenues through June lagging the mid-year totals from last year by nearly 15%,” said SIA President John Neuffer.

“Year-to-year sales were down across all major regional markets and semiconductor product categories. One silver lining was that sales during the second quarter of 2019 narrowly outpaced sales during the first quarter.”

Looking at the data, there is a sense of history repeating itself.

Semiconductor Sales

Although it is not necessarily the easiest of graphs to read, there are a few peaks and troughs which can loosely be attributed to significant events.

Starting with the troughs, each can be attributed to two or three different things. Firstly, macroeconomic events which would have impacted purchasing patterns and investor confidence, and secondly, the introduction of a new ‘G’, therefore a new refreshment cycle for devices.

For the two troughs which can be seen following ’01 and ’09, these could perhaps be attributed to the burst of the dot-com bubble and the 2008 global financial crisis. Following both of these incidents, not only did consumer spending decrease, leading to fewer device shipments, business confidence in mobile technologies would have been impacted. Naturally, purchases of semiconductors would have decreased dramatically.

Another factor to consider is the prospect of a new ‘G’ on the horizon. This evolution could explain the troughs on the graph, but also the surging spikes. If we are to suggest 2G devices achieved mass market penetration in ‘00/01, 3G in ‘04/05 and 4G in ‘11/12, the spikes in semiconductor purchases could be explained by device manufacturers preparing for flagship launches.

Looking at the troughs, these could be explained by consumers delaying the purchase of new devices in anticipation of next-generation launches.

Perhaps this explains the dip which the semiconductor industry is currently navigating at the moment. Smartphone shipments have been steadily declining year-on-year, while the consumer appetite for 4G devices seems to be weakening with the prospect of 5G on the horizon. Smartphone manufacturers and the telcos are hyping up this new ‘G’ so much perhaps we should have little surprise demand for 4G devices is flagging.

Looking at the big chip manufacturers, the misery has been well spread. At Samsung, the most recent quarterly earnings demonstrated 4% decline in revenues and a 53% crash in net profit. The sluggish semiconductor business, often the profit driver for the business, has been the scapegoat this year. At Broadcom, another significant supplier in the mobile space, revenues attached to the Semiconductor solutions declined 10% year-on-year. For Qualcomm, the CDMA Technologies unit saw revenues decline by 12.7% year-on-year, while the Technology Licensing business felt a decrease of 10.5%.

Although the semiconductor industry will not be happy with declining revenues, if history has taught us anything, a spike in purchasing is not far away. 5G networks have been launched and early adopters have their hands on devices right now. It might be a year or two before mass market penetration is achieved, but the preparation for flagship launches will take place in the short- to mid-term future. This means smartphone manufacturers spending a lot more on new, and potentially more expensive, components.

The semiconductor industry is heading through a tough period at the moment, but this appears to be nothing new; a cornucopia of cash might just be around the corner.

Downbeat outlook fuelled by Huawei situation hits Qualcomm shares

Mobile chip giant Qualcomm delivered solid Q2 numbers but a gloomy outlook thanks largely to the Huawei export ban drove down its share price.

Qualcomm’s core numbers were broadly in line with expectations, with revenues a bit below but earnings per share above. But in the ensuing earnings call Qualcomm CEO Steve Mollenkopf warned of a few factors that are likely to negatively affect the company in the coming quarters.

“The Huawei export ban, along with the pivot from 4G to 5G which accelerated over the past couple of months, has contributed to industry conditions particularly in China that we expect will create headwinds in our next two fiscal quarters,” said Mollenkopf. “As a result of the export ban, Huawei shifted their emphasis to building market share in the domestic China market, where we do not see the corresponding benefit in product or licensing revenue.

“In addition, our customers in the China market are working through their existing 4G inventory and deemphasizing their second half 2019 4G launches, as they shift their priorities to their 5G launches in early 2020. As a result, we do not expect the typical seasonal benefits given this unique market dynamics. For the first calendar quarter of 2020, we anticipate reaching the inflection point as our financial results begin to reflect the benefits of our substantial efforts over the years to bring 5G to the market worldwide.”

The reason Huawei’s increased emphasis on China is to Qualcomm’s detriment is two-fold. Huawei presumably uses its own chips in devices it sells within China, so Qualcomm doesn’t have a piece of that action. It does, however, sell components to the other Chinese smartphone makers, so any increase in competitive pressure from Huawei will affect Qualcomm’s revenues from sales to them.

Compounding this is a general softness observed in the Chinese market, which Qualcomm seems to mainly attribute to a lull before the 5G storm. It looks like the channel is trying to reduce the amount of 3G/4G inventory ahead in anticipated demand for 5G devices. As a result Qualcomm has reduced its expectations for global connected device shipments this year by around 100 million.

In the longer term Qualcomm still feels pretty bullish, largely on the back of its claimed 5G modem leadership. Qualcomm reckons the Huawei 5G modem is at least 50% bigger than its one and, of course, Intel’s efforts turned out to be a complete bust. It’s hard to argue with this conclusion so, while Qualcomm’s shares were down 6% in pre-market trading at time of writing, its long term modem prospects still look pretty healthy.

Qualcomm shipment outlook

Qualcomm Earnings Infographic Q32019

Apple eyeing up $1bn Intel smartphone chip purchase – sources

Reports emerged about Apple’s interest in Intel’s smartphone modem business a few weeks back, and now the rumour mill is back up-and-running as more sources suggest conversations.

According to The Washington Post, a deal worth $1 billion, including various patents and staff, is entering advanced talks. Apple has always been a business which wants to control its ecosystem and such a deal would take it one step closer to developing critical components for its devices.

Although the Intel smartphone business unit has been viewed as somewhat of a failure in recent years, it is certainly more developed than Apple’s in-house capabilities. This is an area which is a significant focus for Apple and incorporating the Intel smartphone business into its own operations could help save it years of development work.

This is of course not the first push into the semiconductor world by Apple. Not only has it announced plans to open a 1,200-strong research facility in San Diego, but it effectively ended its relationship with GPU firm Imagination Technologies in 2017. Apple said it would begin to phase out Imagination Technologies in favour of its own GPU components.

For Apple, this seems like a logical move considering the squeeze which is being placed on smartphone manufacturers worldwide. There are several reasons smartphone shipments are declining year-on-year, but the increasing price is certainly a powerful factor.

The iPhone has consistently underpinned profits at Apple, though the global slowdown and challenge to market share from Chinese brands threaten this. Apple is regularly being undercut by rivals, while entry into new markets such as India has been challenging because of the price of devices. Owning more elements of the supply chain, especially components, can help the iLeader reduce the price of handsets and become more competitive in the era of innovation mediocrity.

This is also a slight change in mentality when it comes to Apple’s acquisition strategy. Rarely does the iChief go for the big-ticket acquisitions, preferring to swallow up smaller providers in pursuit of innovation, but it does appear context is ruling above in this instance, assuming the reports are true of course.

For Intel, this would appear to be a very satisfactory exit from a challenging segment. Although the team has always had ambitions in the smartphone segment, it has never been able to make it work. The unit has consistently undermined profits and recent R&D efforts have focused on 5G in other device segments. This transaction would appear to be a win-win for both parties.

Qualcomm makes its flagship chip a bit better

Just when you thought the Snapdragon 855 was as good as it gets, Qualcomm has only gone and put a plus on the end of it.

As its name implies, the Snapdragon 855 Plus is a bit better than the Snapdragon 855 chip, which Qualcomm launched amid much fanfare in Hawaii late last year. The marketing top-line for this launch is that it’s all about mobile gaming, with both the CPU and GPU being a bit faster than in the boring old vanilla 855. As with its predecessor the 855 Plus also plays nice with the 5G X50 modem.

“Snapdragon 855 Plus will raise the bar for elite gamers with the increase in CPU and GPU performance and elevate experiences for 5G, gaming, AI and XR, which is something our OEM customers look to us to deliver,” said Kedar Kondap, VP of product management at Qualcomm. “Snapdragon 855 Plus is our most advanced mobile platform to date and will build upon the success of the 2019 Android flagship Snapdragon 855 5G mobile platform.”

Apart from the faster processors there is talk of something called the Snapdragon Elite Gaming Experience, which includes the Vulkan 1.1 Graphics Driver, which Qualcomm compares favourably to Open GL ES and the ‘Game Jank Reducer’, a must-have for anyone whose game jank has reached troublesome levels. As if that’s not enough this SoC features the fourth generation of Qualcomm’s AI engine and some VR/AR features.

Ren’s back to tell us how Huawei is starting to ditch the US

Huawei founder Ren Zhengfei appears to be little more than a celebrity spokesperson nowadays, but a recent interview suggests the vendor is just fine with its US shunning.

Speaking to the Financial Times, Ren has once again been called into action to address the tensions between China and the US, as a result of which, Huawei has become a prime target for anyone hoping to inflict damage on the worlds’ second largest economy. The message from Ren is relatively simple; we’re doing OK and we’ll move away from US suppliers.

Such comments will certainly set off alarm bells in the offices of some US semiconductor firms, but it should hardly come as a surprise. The ‘Made in China 2025’ strategy might be unpopular with the US and Europe, but it is by no-means a secret.

‘Made in China 2025’ is an initiative set into action by Chinese Premier Li Keqiang during 2015. Through this initiative, the Chinese Government wants to evolve the perception of the country, ditching the ‘world’s factory’ tagline and moving up the value chain towards higher value products and services. The Government will be contributing $300 billion to the project to enable China to compete with the US.

This plan has been heavily criticised by the US for a number of reasons, but ultimately it all boils down to one; this is a genuine threat to the technological domination of the US on the global scene.

Of course, there are plenty of reasons not to like the idea. Some have suggested it violates the World Trade Organization (WTO) rules on self-sufficiency. Others have said trade secrets have been stolen from foreign companies or unfairly obtained through forced joint-ventures. For ‘Made in China 2025’, companies have to move up the value chain, targeting growth industries such as AI or medicine, and these smarts have to come from somewhere.

However, you always have to bear in mind the end-result irrelevant of path taken to get there. If ‘Made in China 2025’ succeeds, the US will no-longer be the dominant force in the technology world, and other economies could be shattered if China replaces imported goods with domestic.

In the latest interview, Ren is suggesting that even if there is a reprieve from President Donald Trump following the G20 summit last weekend, Huawei will continue to move its supply chain out of the US. Perhaps this is the catalyst which was needed to kick the ‘Made in China 2025’ concept up another gear.

“The US is helping us in a great way by giving us these difficulties,” said Ren. “Under external pressure, we have become more united than ever.

“If we aren’t allowed to use US components, we are very confident in our ability to use components made in China and other countries.”

Although there has been a concession from Trump with regard to the ban facing Huawei, some might view this pardon with scepticism. The President’s opinion seems to change more often than the tides so why would any organization pins its hopes and aspirations on the door of the Oval Office. Instead of a power demonstration, the US seems to have pushed the Chinese further towards autonomy.

While it is far from confirmed, we strongly suspect the huffing and puffing from the White House was little more than a demonstration of power. Huawei’s entry onto the Entity List might have been an aggressive move to gain the upper-hand in trade talks with the Chinese; look what we did to ZTE last year, the US appears to be saying, so play nice or we’ll do the same to Huawei.

But it doesn’t seem to have worked; Huawei is still alive and still OK, if you listen to Ren.

How OK Huawei actually is remains to be seen. Ren has been wheeled out to put a positive spin on the situation, but the picture is rather gloomy. Smartphone shipments are set to decline by 40-60% over the remainder of the year, Google hasn’t said it is once again on friendly terms with Huawei despite Trump’s amnesty, and some have questioned whether China is capable of filling the semiconductor hole created through the China/US vacuum.

Huawei has done a lot to add diversity to its supply chain in recent years, while also moving numerous operations to its own fabless semiconductor company HiSilicon, but can it satisfy its appetite for more specialised components? Huawei works with a number of US firms who have niche operations, Qorvo supplies radio-frequency systems and solutions for Huawei for example, and when it comes to specialised components, the US rules the world.

For certain segments of the semiconductor industry, field programmable gate arrays as another example, and China has not been able to replicate the US success just yet. Despite what Ren says about moving Huawei’s supply chain out of the US, it will still be reliant for some incredibly important cogs.

One way of viewing this situation is that there is a short-term demonstration of power. Without the likes of Xilinx, Qualcomm, Qorvo, NeoPhotonics and numerous other semiconductor businesses, Huawei cannot produce the products it is promising customers. Not yet at least.

But long-term, perhaps this approach is simply forcing ‘Made in China 2025’ to accelerate and eroding the control the US has globally over some very high-value, highly profitable segments. Prior to the trade war, US companies were inside the tent. Admittedly conditions were not perfect, but they were inside not outside.

Perhaps this is the watershed moment; companies are going to be forced out as companies like Huawei increasingly look for domestic suppliers, and once they find them (by luck, convenience or necessity) there is no coming back.