Skip to content


China Mobile Phone Makers Gain Market Share in the West Following Huawei’s Setback

A number of Chinese mobile phone manufactures have become the most active players in the world’s mobile phone market. They capitalized on the opportunity from the recent setbacks that Huawei suffered and have begun to gain market share in the Western world. According to an article in the economics section of the French Le Monde published on Thursday October 15, following two of the Chinese mobile phone manufactures, Oppo and Xiaomi, Vivo, based in Guangdong province of China, has begun to enter the European market. Vivo will debut in France on October 20th. In 2019, Vivo sold 110 million smartphones and ranked fifth in the world, with most of these sales made in Asia. Vivo has close to 10,000 engineers in research and development. Its team in France is recruited mostly from Samsung, Honor, Huawei, Nokia and other companies. Vivo has established partnerships with other telecom communication companies and large retailers, and has planned to rely on word of mouth to break ground. It may also soon announce a partnership with a popular sports event.

In a similar situation, Oppo has greatly benefited from its partnership with sports events this year. Following its advertising during Laurent Garros Tennis Tournament, Oppo’s online search volume quickly rose. Oppo was launched in France two years ago. From January to July of this year, its sales volume increased by 350 percent compared with the same period last year. It has since relocated its customer service department to France. The sale of another Chinese brand, Xiaomi, has experienced a similar growth in France. It entered the French market a little earlier than Vivo, and it predicts that its sales growth this year will be a little over 100 percent.

Source: Radio France Internationale, October 16, 2020

China’s Draft Data Security Law: Foreign Companies Caught in the Middle

In July of this year, the Chinese government introduced the Draft Data Security Law. Article 2 of that law states that the law’s jurisdiction extends to “organizations and individuals outside of” China who engage in data activities that harm China’s national security or the public interest of the Chinese people. It is expected that the law will take effect after being discussed and passed at the National People’s Congress next year.

Observers pointed out that the Chinese government may use Article 2 of the law, which extends the legal responsibility for data security to other parts of the world, to achieve its political purposes.

James Andrew Lewis, senior vice president and director of the Technology Policy Program at CSIS, (The Center for Strategic and International Studies) told Voice of America, “The bill gives Chinese authorities the ability to regulate data controllers, whether they are in China or outside of China, so it has an extra-territorial effect.”

Dr. Lynette Ong, an associate professor of political science at the University of Toronto, said that the draft law is certainly a deterrent to foreign companies, just like the Hong Kong National Security Law. “In fact, the effect of this law is to legalize their (the government’s) actions … but this does not mean that, without this law, no action would be taken. If any foreign organization’s actions harm China’s interests, they would also take action, even if there were no such law.”

In addition, under Article 32, as long as the police or another law enforcement agency adheres to relevant law and procedures vis-à-vis a request to access data, data holders will be obliged to cooperate.

Professor Ong said that this legal provision may worry the chief executive of a foreign company. “If I were the chief executive officer of a data company, I might be worried about whether to continue to operate in China. I think data companies are particularly sensitive, because their customers have high expectations for data security. Therefore, if a certain standard cannot be met, they may leave mainland China completely. In fact, this will have a certain impact on the Chinese economy.”


In 2005, Shi Tao, a Chinese journalist, writer and poet, was sentenced to 10 years in prison for releasing a document of the Communist Party to an overseas Chinese democracy site. Yahoo!-China was later discovered to have facilitated his arrest by providing his personal details to the Chinese government.

Source: Voice of America, October 12, 2020

Huawei Performed Poorly in First Month after U.S. Sanction

Well-known Chinese news site Tencent News recently reported that Huawei’s smartphone business suffered a significant decline one month after September when the U.S. sanction was fully in place. Based on retail market share statistics, Apple iPhone 11 seized the opportunity and ranked number one in China’s domestic smartphone market. Xiaomi models took the ranks from two to four. Huawei, which used to hold the top sales position, did not make it to the list of the top five. The Huawei P40 Pro model ranked number six. Apple iPhone 11 won the top place with only 4G models when the competition was offering 5G models. It seems that all those patriotic Huawei supporters who refused to touch Apple products disappeared. It is indeed a surprise that Huawei had no product this year that even made it into the top five club. Huawei has already lowered its output forecast for next year.

Source: Tencent News, September 28, 2020

HKEJ: All Three Top Apple Suppliers Invested in India

The Hong Kong Economic Journal (HKEJ) recently reported that the three largest Apple suppliers – Taiwanese manufactures Foxconn, Pegatron and Wistron – are all betting high on India’s Production Linked Incentive Scheme (PLI). Anonymous sources revealed that the total additional investments that these three vendors have planned is now at the level of US$900 million. The US$6.65 billion PLI program is India’s new investment encouragement initiative to expand the total output of India’s smartphone manufacturing industry. Sources have said that Foxconn received 40 billion Rupees (around US$543 million), Pegatron received 13 billion Rupees (around US$177 million) and Wistron received 12 billion Rupees (around US$164 million). Today Foxconn’s Indian manufacturing volume can meet the full demand of Chinese buyer Xiaomi and it is planning to increase its iPhone volume. Wistron now produces 200,000 second generation iPhone SE per month in India and its plan is to double that figure by the end of this year. Pegatron does not operate in India at this time, but new factories are in the planning stage.

Source: HKEJ, September 29, 2020

SMIC Stockpiling Supplies Far More Than One Year’s Needs

Semiconductor Manufacturing International Corporation (SMIC) is the Chinese partially state-owned publicly-listed semiconductor foundry company. The U.S. Department of Commerce has placed an export restriction on its suppliers. It is scaling up its procurement from upstream suppliers in the United States, Europe, and Japan, with a size exceeding a full-year’s demand for 2020. The procurement items include etching, lithography and wafer cleaning equipment. The purchase of consumables used to maintain the operation of the equipment is also more than one year’s need. SMIC is even cooperating with other Chinese chip manufacturers to establish a shared reserve of such parts, and has established a central warehouse to store these products.

A source from a U.S. chip equipment manufacturer said that SMIC is eager to stock up on equipment. The company ordered more equipment than needed for its current expansion plan. At the end of last year, ASML (ASML.US), Europe’s largest chip manufacturing equipment manufacturer, shipped an advanced extreme ultraviolet lithography (EUV) chip production tool to SMIC. However, the transaction has been put off.

SMIC relies heavily on foreign semiconductor equipment suppliers, including U.S. based Applied Materials, Lam Research, KLA, Taradyne, ASML in the Netherlands and Tokyo in Japan.

Source:, October 4, 2020

LTN: U.S. Sanctions China’s Chip Maker SMIC

Major Taiwanese news network Liberty Times Network (LTN) recently reported that, according to an official document that the U.S. Commerce Department’s Bureau of Industry and Security (BIS) issued, the U.S. government has decided to apply export controls on goods sold to SMIC based on the U.S. Export Administration Regulations (EAR) Section 744.21. The restriction is based on the fact that SMIC products are ultimately used for military purposes. The U.S. Department of Commerce has informed U.S. export companies about this decision. The document listed SMIC and its branches as well as directly related companies inside and outside of China. SMIC is China’s largest chip maker and Huawei’s only hope for a domestic supply of chips. However, SMIC depends heavily on U.S. technology for manufacturing equipment and software. Also, SMIC technology is generations behind leading chip-making vendors like TSMC (Taiwan Semiconductor Manufacturing Company). This new U.S. sanction will place huge pressure on Huawei as well as the entire Chinese chip-making industry.

Source: LTN, September 26, 2020

SMIC’s Claim of Having No Military Tie Is Questionable

Taiwanese news site NewTalk recently reported that U.S. Pentagon officials advised that the Trump administration is considering blacklisting Chinese domestic chip maker SMIC due to its ties to the Chinese military. This could cause major damage to the Chinese chip-making industry, since SMIC is China’s largest and the most advanced chip manufacturer. It is also Huawei’s only hope for low-end chip supply. SMIC has issued announcements claiming it has no relationship with the Chinese military. However, according to Mainland media reports, SMIC was the sole manufacturer for the KD5660 Level-A network exchange chip designed by a company named ArmyFly, which is headquartered in Beijing and is dedicated to serving the Chinese military with focuses on army information network and equipment innovation. The KD560 chip even won the highest award issued by the Equipment Development Department of the Central Military Commission. ArmyFly’s customers are all military branches and SMIC, as its award-winning chip supplier, now declares it has nothing to do with ArmyFly.

Source: NewTalk, September 10, 2020

Micron Announced Cut-Off of Supply to Huawei

Well-known Chinese news site NetEase (NASDAQ: NTES) recently reported that Micron, Huawei’s sole primary memory and flash memory supplier for 20 years, announced compliance with the U.S. ban on Huawei. This is another major blow to Huawei’s supply chain after TSMC’s similar announcement. Micron is the world’s largest semiconductor memory vendor. Micron, Samsung and Hynix together own 95 percent of the world’s DRAM market. Micron is also one of the six vendors that together hold 99 percent of the world’s NAND flash memory market. The only hope Huawei has now is to obtain domestic support from Yangtze Memory Technologies for NAND, ChangXin Memory Technologies (CXMT) for DRAM, and Jinhua Integrated Circuit (JHICC) for DRAM. However, the U.S. already banned JHICC in 2018, due to a lawsuit that Micron filed for unauthorized use of intellectual properties. Yangtze Memory’s manufacturing process depends heavily on high-end equipment like the mask aligners from the Netherland’s SAML, which also uses U.S technology. If the U.S. blacklists the other two Chinese domestic suppliers, Huawei will face a death sentence on the memory side too, in addition to the central processing chips.

Source: NetEase, September 2, 2020