The US government announced on the 15th that it will revise the "foreign direct product rules" and "entity list" to further expand the scope of the blockade against Huawei. The new regulations will directly affect Huawei's chipset supply, and the supply chain may be affected together.

However, according to Taiwanese media Digiimes, Taiwan ’s gallium arsenide foundries, including Wenmao, are still optimistic about the medium- and long-term prospects for mobile phone PA demand.

It is reported that many Taiwanese gallium arsenide foundries have orders from Huawei, which may also be affected by the new US regulations.

In this regard, the source said that the worst scenario is that Huawei's mobile phone market share may be divided by competitors such as Apple, Samsung, Xiaomi, OPPO and vivo, but the mobile phone PA market will eventually regain balance. In other words, Huawei ’s competitors will also fill their PA order vacancies.

The report pointed out that at present, Wenmao and its two main counterparts-Hongjieke and New Optoelectronics have maintained close cooperative relations with major RF and PA IDM companies in the United States, Europe and Japan to provide III-V epitaxial chips. 6-inch foundry service.

The source pointed out that in the long run, IDM is expected to increase support for non-Huawei ecosystems, and PA or RF contract production orders will be firmly in the hands of Taiwan's gallium arsenide foundry.

The source added that the steady order visibility remains at 4-6 weeks and will not be affected much in the second quarter of 2020. However, it is expected that Huawei / HiSilicon may reduce PA orders in the third quarter. However, Wen Mao will still complete the capacity expansion of 5,000 tablets per month before the end of the second quarter of 2020. Whether further expansion will depend on the actual needs of customers and market conditions.