(9 days left!) Be the first with a 200MP camera! Visit Samsung to reserve and gain $100 in Samsung credit!

SamMobile has affiliate and sponsored partnerships. If you buy something through one of these links, we may earn a commission. Learn more.

Samsung might lose one of its biggest clients, Huawei, in the next 5 years


Last updated: December 5th, 2019 at 16:08 UTC+01:00

Despite the rivalry between Samsung and Huawei, the latter company represents a huge revenue stream for the former, particularly in the semiconductor business where the South Korean tech giant has a strong foothold. But Huawei’s reliance on certain components built by Samsung might come to an end over the next few years, and this will potentially leave Samsung in an odd spot from which it might be difficult to recover.

Huawei might stop being one of Samsung’s biggest clients

Samsung Electronics’ five biggest clients at the end of Q4 2019 were Apple, Best Buy, Deutsche Telekom, Verizon, and Huawei (not in that particular order), according to Business Korea citing an official earnings report. This ranking covers all of the segments in which Samsung Electronics operates, including mobile, semiconductor, display, 5G networking equipment, etc.

As far as the relationship between Huawei and Samsung goes, the former company relies on the latter’s memory semiconductors (DRAM and NAND flash memories) for its mobile division. But the Chinese manufacturing industry is changing and it will shift even further due to China Manufacturing 2025 – an initiative by the Chinese Government to bolster local industries and minimize their reliance on components imported from other markets over the next half a decade.

Samsung could suffer big semiconductor losses in the next 5 years

China Manufacturing 2025 will most likely help Huawei in becoming more self-sufficient over the next 5 years, diminishing its dependence on Samsung. The South Korean tech giant might suffer pretty big losses in the wake of this market shift, particularly in the semiconductor segment. In other words, Samsung could lose one of its biggest semiconductor clients, and that’s bound to leave a mark.

Huawei has a grasp on roughly 50% of the Chinese mobile market, this being one of the main reasons why Samsung’s semiconductor business has enjoyed a lot of success in recent years. But if Huawei will start adopting memory chips from local suppliers, this will inevitably hurt Samsung’s revenues.

Fortunately for Samsung, Huawei is not the only big player who needs its semiconductor expertise. Intel has also become an important client, and the production of 14nm-based Intel CPUs for PCs has reportedly begun in Samsung’s facilities.

Samsung might lose ground in other segments as well

Samsung may have won the battle against Huawei in the mobile segment this year, in large part because of the trade restrictions imposed on Huawei in the West. However, both companies are involved in more than just the mobile segment, and in truth, Samsung and Huawei share the same revenue sources, more or less.

The 5G segment is just one big example of a revenue stream shared by both Samsung and Huawei, and although the Korean company has enjoyed a lot of success in the 5G segment so far, Huawei is combatting this with aggressive pricing and – according to some analysts – even better equipment.

Some analysts speculate that Samsung could also lose ground to Huawei in the 5G race over the next few years. There are plenty of markets in which 5G is in early development, giving Huawei a chance to win new contracts and increase its presence. Now, whether or not this will happen is another matter altogether, but there’s no denying that China Manufacturing 2025 will affect the market in some ways that might hurt Samsung Electronics or even other non-domestic companies for that matter.

BusinessGeneral 5GFoundryHuawei
Load 0 comments

You might also like

Samsung signs multi-year 5G patent deal with Nokia

Samsung, the biggest smartphone brand in the world, has signed a multi-year 5G patent agreement with Nokia. As a part of this long-term agreement, the South Korean firm will use Nokia’s fundamental inventions in 5G and other technologies in its smartphones and other mobile devices. Samsung Electronics will make royalty payments to Nokia for its […]

  • By Asif Iqbal Shaik
  • 1 day ago

Samsung, KDDI complete SLA network slicing on a live 5G SA network

In an official newsroom post, Samsung announced that it, along with KDDI, has successfully completed the demonstration of Service Level Agreements (SLA) assurance network slicing on a live 5G SA (Standalone) network in Tokyo, Japan. This is the first time in the industry that companies have generated multiple slices of the network using the RAN […]

  • By Sagar Naresh
  • 4 days ago

Samsung trumps Apple in average 5G speeds in the US

5G has been prevalent in smartphones in the US and other key markets over the past couple of years. But which brand sells the best smartphones in terms of 5G connectivity and performance? Ookla, the company behind the famous SpeedTest app, has released a list showing which brands and smartphones delivered the best 5G quality […]

  • By Asif Iqbal Shaik
  • 7 days ago

When will Chinese Android manufacturers get it that specs don’t matter all that much?

It’s no secret that it’s not just Apple that Samsung has to compete against in the smartphone market. Samsung also has to go up against pretty much every Chinese manufacturer, especially in markets like India where Chinese manufacturers have taken a foothold thanks to how aggressively they price their phones while dangling dazzling impressive spec […]

  • By Danny Dorresteijn
  • 2 weeks ago

Huawei says it’s back in business; should Samsung be worried?

A few years ago, Huawei was Samsung’s biggest rival. The Chinese firm even topped global smartphone sales briefly. However, its business took a significant hit after the US first banned Huawei’s smartphone sales in the US and then stopped its network equipment business. It even placed restrictions on the company, preventing it from getting critical […]

  • By Asif Iqbal Shaik
  • 4 weeks ago

Samsung’s 108MP camera sensor used in a phone running HarmonyOS

So far, many smartphone brands have used Samsung’s 108MP ISOCELL HM2 sensor, including Realme and Xiaomi. However, all those devices are powered by Android. Now, for the first time, Samsung’s 108MP ISOCELL HM2 sensor is being used in a non-Android smartphone—WIKO 5G—powered by Huawei’s HarmonyOS. WIKO is a smartphone brand headquartered in France. The company […]

  • By Asif Iqbal Shaik
  • 4 weeks ago