Huawei, the Chinese telecommunications equipment firm, asserts that it is incorporating an exceptionally small chip into its latest Mate 60 Pro smartphone – a technological achievement that China is not expected to have mastered. Should we be concerned about this from a competitive standpoint?
It’s highly improbable. The acclaimed 7-nanometer chip employed by Huawei and produced by Semiconductor Manufacturing International Corp. (SMIC) is likely more of a symbolic display of national pride rather than a viable commercial product.
The U.S. government is currently conducting an investigation into the Mate Pro smartphone and Semiconductor Manufacturing International Corp. (SMIC). This inquiry has arisen because the technology used in these devices is considered to be too advanced for China to have developed independently, especially without access to technology that the U.S. has restricted. Additionally, Geely, the Chinese automobile manufacturer, has claimed to use the same chip in one of its SUV models.
The chip in question is named the Kirin 9000s. Over a year ago, semiconductor analyst Dylan Patel noted that SMIC had begun shipping these 7-nanometer chips discreetly. The key question is whether Huawei and SMIC could have independently developed this technology. The likely answer is yes, but it might not have been achievable at a large scale or economically viable without external influences.
SMIC has the capability to manufacture 14-nanometer (nm) chips using a technology known as “Deep Ultraviolet” or DUV. This technology can theoretically be adapted for producing 7 nm chips, but it would require design modifications and would result in high rates of failure.
Without access to the more suitable “Extreme Ultraviolet” (EUV) technology, SMIC would have to rely on repeated burn cycles, leading to only a small percentage of usable chips and tying up expensive equipment. Many experts in the integrated circuit (IC) industry speculate that SMIC’s 7 nm chips could potentially be twice as costly as comparable chips manufactured by Taiwan Semiconductor (TSMC).
U.S. export controls have stirred significant frustration in China, prompting the country’s semiconductor industry, which heavily relies on government subsidies, to demonstrate its ability to function independently. However, U.S. restrictions often have loopholes. Several advanced companies, such as Intel, have established full manufacturing operations within China, making it relatively straightforward for Chinese firms to attract and hire skilled staff from these organizations.
Additionally, companies like Lam Research, a prominent player in semiconductor equipment manufacturing, handle both outsourced production and maintain their own factory in Malaysia, a nation strongly supportive of China and its technological aspirations.
