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Huawei’s 5G chip: Is it that surprising?

October 1, 2023
in Technology
Huawei’s 5G chip: Is it that surprising?
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Logo of Huawei on the main building of Huawei Base in Songshan Lake District of Dongguan city, Guangdong Province, China. Credit: 123RF

Well, it’s here. In June, the rumors were there’d be a 5G Huawei phone towards the end of the year. It hit the shelves two or three months earlier than expected.

In my previous article, I argued that Huawei’s handset would be more of a domestic play, and I stand by that argument. While I did argue Huawei and SMIC creating a 7nm chip was no surprise, what has been produced has nevertheless surprised some, including myself.

So what is good about this chip? How will Huawei and SMIC progress from here? And what does it mean for others in the industry?

The positives

Let’s start with the positives from a Chinese point of view. Although not 100% confirmed, as we are not sure who else could possibly fabricate this chip for Huawei, SMIC has seemingly produced a true 7nm density chip without EUV. (Some still speculate that SMIC isn’t responsible.) Despite what many believe this was always possible – TSMC did it back in 2018 and SMIC did it by itself earlier in 2023 with a bitcoin mining chip. So no surprises here. When it comes to using DUV equipment to create 7nm density designs SMIC now seems to be on a par with the rest of the world. What the yield looks like is unknown, I can’t believe it is as low as 10%, and also it cannot be as good as an EUV process. I can only speculate that it is good enough and will improve as SMIC gets more customers for this process. With government subsidies, the economics of low yields mean less to SMIC than they might to other foundries.

The other positive is its RF front-end. While Huawei was always a leading modem designer, it previously relied on US suppliers like Skyworks and Qorvo for the RF front-end. This is no longer the case with the Kirin 9000S. It’s impressive that a completely self-developed front-end works at 5G speeds, even if the OS still says 4G.  

The negatives

Nevertheless, there are a few negatives. Despite the rhetoric, this is not a completely indigenous Chinese chip. It is based on Arm IP, it uses SK Hynix memory, it was presumably designed somehow using US EDA tools (I would like to know if it wasn’t), and the fabrication process used foreign equipment from the likes of ASML, AMAT, LAM, TEL, KLA, etc.

Sanctions to date haven’t stopped China’s equipment imports. In fact, they are higher than ever on this front rather than finding ways around sanctions. China hasn’t really needed to do anything. The equipment that can be used for 28nm can be repurposed for 7nm, and perhaps 5nm in a couple of years. While this is a positive for China, it does mean that it is still reliant; products from the likes of SMEE are still far behind. SMIC is keeping quiet. It won’t want to have any stricter sanctions placed on it, but really, the only way to truly stop it would be to limit or ban all sales into China for all such equipment. This is unlikely to happen.

The use of SK Hynix memory is also interesting. This must have come from old stockpiles as SK Hynix was not aware of any recent sales to sanctioned Huawei. This answers the question as to whether domestic DRAM or NAND is ready for such applications yet, and it seems the answer is no, as Huawei opted for SK Hynix memory which was first announced in 2020. We don’t know how much is stockpiled, so it could be possible that future versions of the chip will be forced to change to domestic suppliers.

The fallout

The popular opinion in Chinese society is that China has broken US sanctions, Huawei and SMIC have saved China, and the Huawei phone deserves all the praise it can get. In one sense this is true. It performs like a leading edge chip from a couple of years ago and is easily good enough for any application today. I myself use a phone more than two years old.

There are others outside of China that completely dismiss this chip as a low-yield propaganda project. The likes of MediaTek announced its own equivalent chip using TSMC’s 3nm process almost at the same time as Huawei’s announcement. Huawei itself used to use TSMC’s 5nm process before sanctions, so in fact, sanctions have caused Huawei to go backward.

The truth is in between of course. This is a serious chip, but not surprising. We know 7nm chips can be created using multi-patterning on the ASML 1980i series of DUV lithography machines, and this unsurprisingly is what SMIC has done. We know Huawei subsidiary HiSilicon is great at designing handset chips, and this is what they’ve done extremely well here.

Threats and restrictions remain, however, sanctions could get tighter. SMIC could be punished for supplying Huawei.; it does have a considerable foreign business that could be threatened for example. Could Huawei itself be sued in any way for using SK Hynix chips or perhaps illegally using US tools? If SMIC produced a chip where its customer could not prove it was using properly licensed tools, this could also be an issue for SMIC. I know from my own experience that not having a proper license for EDA tools in China can be quite common. This in turn could restrict any sales outside of China. Even if all this is fine, selling outside of China will still be difficult. This is an expensive $1,000 phone with no Google services installed and a chip performing to the standards of two years ago. The average consumer is not going to want to install Google services manually themselves, let alone fork out $1,000 for doing so. Patriotic marketing does not translate outside of China.

Finally, this new device may mean hard times in the Chinese market for Huawei’s competitors and other chip companies. As Huawei’s sales dropped in recent years, Oppo, Vivo, Xiaomi, and Apple, all took a piece of the pie. This in turn led to more sales for Qualcomm and MediaTek who supply these other handset companies. Will Huawei’s sales rise to eat into that of other Chinese handset companies or Apple’s? If Apple sales in China remain strong then Huawei’s phone will only serve to take market share away from other Chinese brands and hurt Qualcomm and MediaTek as well in the process.

technode contributor on chips and semiconductor, China insights, China voice

Stewart Randall is Head of Electronics and Embedded Software at Intralink, an international business development consultancy which helps western tech businesses expand in East Asia. You can connect with…
More by Stewart Randall

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Copyright for syndicated content belongs to the linked Source : TechNode – https://technode.com/2023/09/21/huaweis-5g-chip-is-it-that-surprising/

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