Huawei Technologies Co. is reportedly set to release its most advanced domestically made chip in the Mate 70 series, amid ongoing U.S. sanctions.
What Happened: The new chip will power select models in Huawei's Mate 70 lineup, which is expected to launch next week, reported the Wall Street Journal, citing people familiar with the matter.
The launch comes as Huawei continues to increase its market share in China, where it has seen a rise in consumer demand.
In the third quarter of this year, Huawei's market share in China grew to 15.3% from 8.6% last year, positioning it as a significant competitor to Apple Inc. AAPL in the high-end smartphone market.
The new chips, produced by Semiconductor Manufacturing International Corporation or SMIC, leverage advanced technologies to improve performance and power efficiency, allowing Huawei to compete more effectively with Apple's offerings.
“The Mate 70 will continue to put more pressure on Apple in China,” said IDC vice president Bryan Ma, according to the report.
Although Huawei's chips still lag behind Apple's in terms of power efficiency, he noted that the difference may not be significant as long as users can get through the day without worrying about charging, the report noted.
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Why It Matters: This development coincides with an earlier report that suggested Huawei plans to begin mass production of its new AI chip, the Ascend 910C, in early 2025, despite facing major challenges from U.S. trade restrictions.
In May earlier this year, the Joe Biden administration canceled export licenses for leading U.S. semiconductor companies such as Intel Corp. INTC and Qualcomm Inc. QCOM, blocking them from providing essential chips to Huawei.
During the same month, a report from Counterpoint Research suggested that Huawei surpassed Samsung Electronics Co. SSNLF in global foldable smartphone shipments for the first quarter of 2024.
Last month, U.S. lawmakers called on the Department of Commerce to take stronger measures against Huawei’s reported efforts to evade sanctions by using a covert network of semiconductor facilities.
Price Action: At the time of writing, Apple shares increased by 0.02% to $228.56 in after-hours trading, following a 0.21% decline to $228.52 during Thursday's regular session, according to Benzinga Pro data.
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