Huawei has more tough years to look forward to than they might expect. While the Mate 60 Pro, powered by Kirin, may have given the impression that Huawei was back in the advanced chipmaking business, the truth is that they would not be able to sustain this, certainly not without the help of… well, the US.
There is no denying that the Mate 60 series is probably the best-selling Huawei phone in a long time, but this had a lot to do with the nationalist sentiment, and government backing surrounding the company. The newest, most advanced Kirin chip – the 9000S is rumored to be developed by Semiconductor Manufacturing International Corporation (SMIC).
SMIC is probably the most advanced foundry company in China, but it still has a lot of ground to cover when compared to other advanced semiconductor foundries, like TSMC, or Samsung. With these foundry leaders moving towards 2nm process node, SMIC has found it difficult to keep up. Even the Kirin 9000S is based on SMIC’s quasi-7nm (N+2) fabrication technology – something you just can’t expect with newer phones globally.
Also, this hype for SMIC moving towards smaller chips is kind of, overblown. See, the yield per wafer for their 7nm chips is ~15% only. Without EUV equipment available (due to US sanctions), it’s already difficult to achieve this, but SMIC seems to be using extra exposure, and multi-patterning using DUV lithography till they achieve their desired size.
This, in turn ramps up the production costs, to (some say) about 100x higher than it’s competitors. But, with all this, Huawei still seems to be profiting – how? Well, the answer has to do with China’s aim of being self-sufficient in the semiconductor industry.
The Chinese government had given SMIC subsidies of up to $293 million in 2019. They, in turn reported total profits of nearly $235 million. This goes to show how the company wouldn’t have survived without the government funding.
While China has made significant progress in this area thanks to the funding, it still has a long way to go. In 2021, SMIC could only achieve a 28nm process, but it has since closed the gap with its competitors. However, the future for them looks rather bleak, their paths laid with nothing but obstacles, one after the other (better yield, pricing, and most of all – going past 7nm).
(It) demonstrates the technical progress China’s semiconductor industry has been able to make without EUV (extreme-ultraviolet) lithography tools. The difficulty of this achievement also shows the resilience of the country’s chip technological ability.Dan Hutcheson – TechInsights
Like many have predicted, “Cold war 2.0 will be a race for semiconductors, not arms,” it’s true, but SMIC have their work laid out for them, and they’ll soon need to devise a way to move past the hurdles.
This is all we know for now, but rest assured that we will keep you updated as new information becomes available.