Ming-Chi Kuo: The market is too optimistic about MediaTek's chip shipments to Huawei

The latest report released today by Tianfeng International Securities analyst Ming-Chi Kuo shows that the market's expectations for MediaTek's chip shipments to Huawei are too optimistic, and investors should wait for the United States to further announce the details of the Huawei ban before making plans.

Guo Mingchi pointed out that since the United States announced a new ban on Huawei on May 15, the market expects that MediaTek's share of Huawei's mobile phone chip supply will increase significantly. It is expected that MediaTek's chip shipments to Huawei in the second half of this year and next year will reach 25 to 30 million and more than 100 million, respectively.

However, the assumptions of this optimistic forecast include three factors: first, TSMC cannot help HiSilicon manufacture mobile phone chips; second, the United States does not allow Qualcomm to ship 5G mobile phone chips to Huawei; third, the United States allows MediaTek to ship 5G mobile phone chips to Huawei. Guo Mingchi emphasized that the above assumptions are too optimistic and suggested that investors should wait for the United States to further announce the details of the Huawei ban.

Guo Mingchi believes that although the probability is low, under certain circumstances, TSMC may still help HiSilicon manufacture mobile phone chips. If TSMC can continue to produce HiSilicon mobile phone chips, the market's optimistic shipment forecast for MediaTek will not hold true.

At the same time, Guo Mingchi further pointed out that if the United States does not allow Qualcomm to ship 5G mobile phone chips to Huawei, but allows MediaTek to ship 5G mobile phone chips to Huawei, this move will damage U.S. interests.

Even if only MediaTek can ship 5G mobile phone chips to Huawei, urgent orders from Huawei have currently occupied most of MediaTek's support resources, which may affect MediaTek's orders for other Android brands.

According to the latest industry survey by TF International, OPPO and Xiaomi have already started designing 5G models using Qualcomm 4350 solutions, as Qualcomm provides more support resources. The price is expected to be less than US$199 and will be shipped in the first quarter of next year. As for the market of 5G mobile phones priced below US$199, Samsung and Vivo are also expected to give priority to Qualcomm or Samsung LSI solutions, considering the support resources of MediaTek.