TAIPEI, Taiwan - On August 17, the U.S. Department of Commerce announced the latest revisions to its Entity List, which now includes 38 additional Huawei subsidiaries. Suppliers are prohibited from providing semiconductor products and components manufactured with U.S. equipment and software to Huawei and its subsidiaries. TrendForce provides the following analyses on the impacts that the expanded sanctions against Huawei have on five tech industries, including semiconductors, memory products, smartphones, display panels, and 5G communications.
Although MediaTek is confirmed to be unable to ship its smartphone APs to Huawei following the August 17 announcement, MediaTek may subsequently look to other high-end smartphones as its target market in 2021 and raise its 5G AP market share. At the same time, Unisoc may become the AP provider of choice for Chinese smartphone brands’ entry-level models.
Huawei accounts for a relatively large revenue share for other companies, including RF IC manufacturer Richwave and China-based fingerprint sensor manufacturers Goodix and Silead. Of the above three, Richwave may continue shipping its new WiFi 6 products, which according to preliminary investigations do not contain U.S. technology, to Huawei following the latest restrictions.
On the other hand, Goodix is expected to be affected to a larger degree since optical FoD (fingerprint-on-display) chips, which are part of its portfolio, are mostly outsourced to 8-inch fabs, making it difficult to eliminate U.S. technology from the manufacturing process.
Novatek and FocalTech are the chief suppliers of TDDI for Huawei. The latest trade actions will have a limited impact on Novatek, thanks its diverse clientele and product portfolio. FocalTech will be affected to a much higher degree in the short run due to its focus on China. Nevertheless, FocalTech may be able to compensate by capturing more orders from other Chinese clients.
TrendForce previously forecasted a 1.3% YoY revenue decline in 2020 for the CIS (CMOS image sensor) industry due to the poor sales performances of the smartphone and automotive markets, which are the primary markets for CIS applications, as a result of the COVID-19 pandemic. After the latest restrictions on Huawei by the U.S. government on August 17, TrendForce is now further increasing the forecasted decline in CIS revenue to 1.5% in consideration of Sony’s inability to ship its high-end camera modules to Huawei.
With regards to foundries, TSMC, SMIC, and Win Semi rank as the top three companies in terms of revenues from Huawei’s wafer input. Huawei has completely stopped placing wafer input orders at TSMC, while SMIC and Win Semi will also stop shipment to Huawei in accordance with U.S. sanctions.
