• China’s HiSilicon doubles revenue despite US sanctions.
• Strong domestic smartphone demand drives growth, uncertain long-term prospects.

HiSilicon’s doubling of revenue in 2024 reveals the paradox at the heart of China’s semiconductor resilience: restricted from accessing advanced Western technology, yet flourishing in a protected domestic market.

Huawei’s chip design unit has achieved 100% year-over-year growth while operating under some of the most stringent US trade restrictions ever imposed. The numbers tell a story of domestic triumph amid international isolation.

Counterpoint Research reports that HiSilicon has captured 12% of the global premium Android smartphone system-on-a-chip market in 2024, up from 8% in 2023, securing third place behind Qualcomm (59%) and Samsung Electronics (13%).

The growth, primarily fuelled by strong sales of Huawei’s Pura 70 and Mate 70 series smartphones, raises questions about the effectiveness of US sanctions and the viability of technological decoupling.

Domestic success amid international restrictions

HiSilicon’s revenue growth represents a significant achievement in semiconductor resilience, particularly considering the ongoing US trade restrictions that began during former President Donald Trump’s first term in 2019.

The sanctions placed Huawei on a trade blacklist and effectively cut off its chip supplies in 2020, and were designed to cripple the company’s technological advancement.

Despite the challenges, Huawei successfully launched its Mate 60 handset series in 2023, featuring the domestically produced Kirin 9000s processor, reportedly manufactured entirely in China with Semiconductor Manufacturing International Corporation (SMIC) as the manufacturing partner.

The company continued its momentum with the Pura 70 smartphones using the Kirin 9010 processor, and later, the Mate 70 smartphones with the Kirin 9020 chip.

“The Kirin 9020 was not a major redesign from its earlier versions,” according to Canadian semiconductor research firm TechInsights, suggesting that HiSilicon is focusing on iterative improvements rather than revolutionary changes while in its current technological constraints.

New challenges emerge

The resilience displayed by HiSilicon faces hurdles as the US recently issued guidelines defining the use of Huawei’s Ascend artificial intelligence chips “anywhere in the world” as a violation of US export controls.

This further complicates Huawei’s efforts to expand its semiconductor capabilities globally. At the same time, HiSilicon’s market position faces increasing domestic competition as Taiwanese chipmaker MediaTek gains momentum in China.

MediaTek captured 11% of the global premium Android smartphone chip market in 2024, with its revenue growing 88% year-over-year, nearly matching HiSilicon’s growth rate. Meanwhile, other Chinese tech firms are following Huawei’s lead in designing their chips.

Xiaomi, one of Huawei’s main competitors, is preparing to launch its smartphone chipset Xring O1 this month, as announced by founder and CEO Lei Jun on Weibo.

Beyond smartphones: Automotive Expansion

As part of its broader strategy, HiSilicon is expanding into the automotive industry. The diversification represents an important element of what some industry observers have called Huawei’s “Backup Plan 2.0” – a strategic pivot to reduce dependence on smartphone chips alone.

Huawei’s chairman Xu Zhijun previously announced plans to build a smart cockpit platform based on Kirin chips and the company’s Harmony operating system. The company has already made inroads in this sector, with HiSilicon having signed a cooperation agreement with Chinese automaker BYD to provide its Kirin 710A as the first system-on-a-chip to power digital cockpits.

The automotive push aligns with Huawei founder Ren Zhengfei’s approach outlined in a 2019 company document, in which he stated: “Huawei does not manufacture cars, but focuses on the ICT industry to become an incremental ICT component supplier for automobiles, helping car makers.” The strategy allows Huawei to use its semiconductor resilience and expertise in a growing sector and diversify away from areas most directly impacted by US restrictions.

Long-term outlook remains uncertain

While HiSilicon’s current performance demonstrates significant resilience, Counterpoint analyst Akash Jatwala said the company’s growth “will remain uncertain in the long term” due to supply chain uncertainties and its limited presence outside China.

The lack of Google Mobile Services on Huawei devices continues to hamper its international appeal, constraining HiSilicon’s potential global market share. For now, Huawei appears committed to its strategy of technological self-reliance.

In 2019, when US sanctions first threatened to disrupt its supply chain, He Tingbo, the president of HiSilicon, released a letter to staff comparing their efforts to the “Long March” of the Communist Party’s Red Army in the 1930s – framing their work as a difficult but necessary journey toward independence from foreign technologies.

The approach has yielded impressive results so far, with HiSilicon’s doubling of revenue serving as evidence of the company’s resilience to externally-placed obstacles.

However, as international restrictions tighten and domestic competition intensifies, maintaining this growth trajectory will require continued innovation and diversity beyond smartphones.

The success of HiSilicon exemplifies China’s broader push toward technological self-sufficiency in semiconductors – a critical industry that underpins everything from consumer electronics to national security.

As tensions between the US and China continue to shape the global technology landscape, HiSilicon’s performance will remain an indicator of how effectively Chinese companies can navigate international restrictions and pursue domestic innovation.