ZTE edged out Huawei in the server telecom and smartphone

ZTE edged out Huawei in the server, telecom, and smartphone markets

ZTE has overtaken Huawei, the market leader in servers, core networks and storage solutions – in the annual report it reported an increase in market share in these segments. Traditionally, Huawei has played a leading role here, but over the past year, ZTE’s revenue percentage grew at double-digit rates inside and outside of China.

Image source: ZTE

Image source: ZTE

While ZTE doesn’t yet have a significant share of the global server market, unlike its Chinese counterparts Inspur, Huawei, and Lenovo, the company has previously reported that its server solution and storage solution revenues doubled in the first three quarters of 2021 compared to the same period of the previous year. The company stressed that its servers accounted for the largest share of the business of Chinese mobile operator China Mobile, the largest in China, for the third year in a row. Such activity poses a direct threat to Huawei, which is still struggling to access some key components due to US sanctions.

According to Omedia, Huawei’s server revenue fell 44% in the third quarter of 2021 alone, which was immediately capitalized on by Chinese companies like Inspur, Lenovo, H3C, and ZTE, all of which report revenue growth in China over the corresponding period.

In addition, ZTE quietly started building 5G base stations based on the 7nm process. The company used the production facilities of the Taiwanese TSMC to manufacture chips. According to anonymous industry sources, modern chip packaging technologies are also used to combine semiconductors with different functions in one module.

According to Nikkei Asia, Huawei’s inability to do business with TSMC due to US sanctions played into ZTE’s hands. Now the latter company expects a significant growth in the market for base station solutions and also shows interest in one of the most advanced TSMC manufacturing processes – 5 nm.

But while ZTE hasn’t been sanctioned to use TSMC’s latest technology, it’s still unable to sell its base stations to many Western companies due to US-imposed restrictions. This has led the company to focus primarily on China. According to sources, ZTE is ramping up its chip production quite aggressively, and while volumes are still small, impressive progress is already being made.

Image source: ZTE

Image source: ZTE

In addition, ZTE is trying to rebuild its once thriving smartphone business – together with Xiaomi and Oppo, they are also trying to take a share from Huawei, which is suffering from Western sanctions. ZTE’s global smartphone shipments totaled 6.4 million units in the first three quarters of 2021. The company sold more smartphones in 9 months than in all of 2020 (5.9 million). The global market share has grown from 0.5% in 2020 to 0.7% in the past.



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Johnson Smith

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