context: The semiconductor industry has become one of the key battlefields in US-China tech rivalry. The US, together with Japan and the Netherlands, has largely cut off the supply of the most advanced AI chips and related manufacturing equipment to the PRC. Huawei and other domestic companies have invested heavily in domestic substitution, albeit with limited success.
Huawei’s new flagship smartphone Mate 60 Pro has aroused large public attention, Caixin reports. After state media claimed that the phone uses a domestically manufactured chip, Sina notes, share prices of many domestic semiconductor manufacturing companies soared, including
- SMIC (Semiconductor Manufacturing International Corporation) Hong Kong by 11.68 percent
- SMIC mainland by 4.5 percent
- Ofilm by 2.98 percent
- GigaDevice by 2.43 percent
Caixin says that Huawei has not yet officially confirmed any details on the chip, except for its name ‘Kirin 9000s’. Amidst enthusiasm for Huawei’s supposed breakthrough, Sina and Caixin caution that several questions remain unanswered, including
- who manufactures the chip?
- which manufacturing equipment is used, and will Huawei be able to continuously improve it?
- how high are the yield rates of the production line?
- how cost-efficient is production?
- is production at scale possible?
Industry insiders told Caixin that the production process of Kirin 9000S appears to be at a level similar to TSMC’s 7nm process; this year, Apple and Qualcomm will be using TSMC’s 3nm and 4nm processes, respectively (CP note: smaller means better).
Huawei’s last chip capable of supporting 5G phones, the Kirin 9000, was produced by TSMC (Taiwan Semiconductor Manufacturing Company) with its 5nm process, according to Caixin. However since Huawei was added to the US entity list in May 2020, TSMC stopped manufacturing chips designed by Huawei.
Huawei initially relied on stockpiled Kirin 9000 chips, but was forced to stop manufacturing 5G smartphones in July 2021, Caixin says, and as a consequence, Huawei’s mobile phone sales plummeted from No.1 globally, with an 18 percent market share in Q2 2020, to No.5 globally, with a 2 percent market share in Q1 2021.
Caixin predicts that Huawei will be able to recover some market share. However, the article cautions that this will mostly be a domestic effect: the lack of Google Android will still limit the appeal of Huawei products in overseas markets.
Huawei is yet to officially confirm whether the phone has 5G capability. Early users report download speeds of around 500 Mbps, Caixin says, whereas 4G has a limit of 100 Mbps. But higher speeds could be achieved through satellite communications rather than regular 5G, Sina speculates, though this would drive up cost and power consumption.
Caixin further notes that it is unusual for Huawei to start selling a flagship smartphone before the official release, expected to take place on 12 September in Shanghai.