Huawei Technologies, the Chinese tech giant, has slashed the prices of several high-end phones as part of new efforts to boost sales, according to reports from China. Additionally, the entity plans to begin mass production of its most advanced AI processor in the first quarter of 2025.
According to the official online store, Vmall, the company has reduced the price of its high-end Pura 70 Ultra device, launched in April, to 8,999 yuan ($1,233) for the 1 terabyte version. This represents an 18% reduction from the original price of 10,999 yuan. The 512 GB version is sold with a 20% discount.
Additionally, the Mate X5, a foldable smartphone introduced in September 2023, is currently available at a discounted price of 2,500 yuan. This is 19% lower than its original starting price of 12,999 yuan. According to data from research firm CINNO, the model has been the most popular foldable phone in China since its introduction.
People familiar with the matter say Huawei is struggling to make enough chips due to U.S. restrictions. Could it be that the organization needs more funding, hence this decision?
Initiative Huawei
Local shipments of high-end smartphones (phones costing more than US$600) from the Shenzhen-based company increased 34% in the September quarter, according to consultancy Canalys. This gave to Huawei a 33% share of its national market, thus getting closer to Apple, which still had a 52% share and occupied first place.
In September, Huawei introduced the Mate XT, the world’s first tri-fold smartphone. According to Counterpoint, the devices and the Mate X6 are expected to further strengthen the company’s dominant position in the segment.
According to CINNO, Huawei shipped 1.12 million foldable handsets in the third quarter, an increase of 97% from the previous year. The research firm says the Mate X5 was a significant factor in the increase in shipments.
However, according to TechInsights researchers, the current Mate 70 series is seeing lower sales due to weaker processors than its competitors. Counterpoint Research predicts that the Mate 70 series handsets will ship more than 10 million units over their lifetime.
Still, the release of the Mate 70 has been closely watched by the industry to see how Huawei is doing in chip development. The US-banned company installed a 7-nanometer chip in its Mate 60 series smartphones last year.
Huawei smartphones use South Korean memory chips
TechInsights, a research firm, reported that Huawei Technologies’ most recent lineup of flagship smartphones is equipped with memory chips made by South Korean semiconductor supplier SK Hynix. Indeed, Chinese-made alternatives are rare due to a U.S.-imposed ban on the export of advanced chipmaking equipment to the continent.
Additionally, the Canadian company’s analysts discovered SK Hynix’s 12GB low-power mobile DRAM and 512GB NAND memory in a Huawei Mate 70 Pro handset. SK Hynix’s 16 GB DRAM and NAND were behind those of the Mate 70 Pro Plus, which was notably the most expensive model.
According to TechInsights principal analyst Jeongdong Choe, SK Hynix used 14-nanometer technology and advanced extreme ultraviolet lithography to build these mobile DRAM modules.
NAND is a form of memory used for flash storage, while DRAM, or dynamic random access memory, is widely used in smartphones and computers.
Reports claim that SK Hynix began mass-producing the DRAM chips found in the Mate 70 Pro in the second half of 2021. This was nine months after the United States cut off Huawei’s access to the processors and other American technologies, such as Google services, significantly affecting the Chinese company’s smartphone business.
Huawei will mass produce its new AI chip in early 2025
The telecom giant has reportedly sent models of its new chip, the Ascend 910C, to some tech companies and has started taking orders for it. The Ascend 910C is supposed to compete with chips made by American company Nvidia.
According to a source briefed on the results, the 910C is manufactured by popular Chinese chip maker Semiconductor Manufacturing International Corp (SMIC) (0981.HK), which has opened a new tab on its N+2 process. However, due to the lack of advanced manufacturing equipment, the chip yield was limited to around 20%.
However, to be commercially viable, advanced processors must have efficiencies greater than 70%. The sources said Huawei was forced to cut production targets and postpone fulfilling orders for the 910B, the company’s most sophisticated processor, due to its yield being only around 50%.
However, the trade and security dispute between the United States and China centers on Huawei. Washington has implemented a series of restrictions against Huawei and other Chinese companies. They claim that their technological advances pose a threat to U.S. national security.
These constraints have hampered Huawei’s ability to achieve sufficient efficiency for its advanced AI chips. This percentage corresponds to fully functional chips coming off the manufacturing line to make them commercially viable.
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