After the modification of chip rules in the United States, chip companies such as TSMC, Samsung, and Qualcomm were unable to ship freely, and the operation mode of the global semiconductor industry chain was broken. More and more countries began to develop their own chip technology.

Among them, Europe plans to invest 54 billion euros to develop its own processor technology to gradually eliminate the impact of external supply chain changes. The development of the domestic semiconductor industry chain has also been further accelerated due to changes in the external environment. Some chip products that could only be imported have gradually emerged as domestic chip substitutes in the domestic market.

After entering 2022, the situation began to reverse, with no one buying American chip products that were previously in short supply. According to relevant data, in 2022, the number of chips imported by Chinese companies decreased by 97 billion, and American chip giants such as Qualcomm and Nvidia began to sell their own chip products at reduced prices.

The main reason for this situation is that the balance of chip trade has been disrupted, and many companies with demand cannot import chips. Companies with no demand or less demand are naturally unable to undertake such a large inventory in the short term.

No one bought Meixin anymore? Exposure of Qualcomm Resumption Reasons

According to data from market research firm Gartner, in 2022, the purchase expenditure on chips accounted for 37.2% of the global top ten equipment manufacturing market, a year-on-year decrease of 7.6%.

Terminal device manufacturers, including Apple and Huawei, have reduced their purchases of chip products. To sum up, in one sentence, no one is paying for Meixin anymore. Based on this matter, it is not difficult to explain why recently, Qualcomm faced official pressure from the United States and made it clear that it could resupply chip products such as 4G and WiFi to Huawei.

Firstly, the oversupply of chip products and the increase in inventory have led to an increase in operating costs for enterprises. Last year, Qualcomm experienced a significant decline in revenue and net profit. Currently, domestic and foreign companies' demand for chip products is concentrated in mature processes such as 28nm. The 7nm and 5nm processes used in mobile phone chips have severely overcapacity.

At the end of last year, TSMC reported that the utilization rate of EUV lithography machines was insufficient and that some EUV lithography equipment would be shut down to save capital expenses. Qualcomm's supply of chip products to China can not only solve the inventory problem of some chip products for itself, but also alleviate the impact of external chip demand decline on it.

Secondly, Huawei and Qualcomm have had cross licensing on 5G patented technology, which is precisely because of the cross licensing between the two parties that led to the subsequent shipment of 4G chips by Qualcomm to Huawei. If Qualcomm is unable to ship 4G chips to Huawei, the other party may need to pay a significant 5G patent licensing fee to Huawei.