China's Huawei poised to overcome US ban with return of 5G phones with its own chipmaking technology

[beijingwalker]

China's Huawei poised to overcome US ban with return of 5G phones with its own chipmaking technology​

By David Kirton
July 12, 202310:10 AM GMT+8

• US-sanctioned giant likely to produce 5G chips domestically
• Chips expected to use Huawei EDA tools and SMIC production
• Semiconductors could have relatively low yield rate of 50%

SHENZHEN, China, July 12 (Reuters) - China's Huawei Technologies is plotting a return to the 5G smartphone industry by the end of this year, according to research firms, signalling a comeback after a U.S. ban on equipment sales decimated its consumer electronics business.

Huawei should be able to procure 5G chips domestically using its own advances in semiconductor design tools along with chipmaking from Semiconductor Manufacturing International Co (SMIC), three third-party technology research firms covering China's smartphone sector told Reuters.

The firms, citing industry sources including Huawei suppliers, spoke on condition of anonymity because of confidentiality agreements with clients.

Huawei declined to comment. SMIC did not respond to a request for comment.

A return to the 5G phone market would mark a victory for the company that for almost three years said it was in "survival" mode. Huawei's consumer business revenue peaked at 483 billion yuan ($67 billion) in 2020, before plummeting by almost 50% a year later.

The Shenzhen-based tech giant once vied with Apple (AAPL.O) and Samsung (005930.KS) to be the world's biggest handset maker until rounds of U.S. restrictions beginning in 2019 cut its access to chipmaking tools essential for producing its most advanced models.

The U.S. and European governments have labelled Huawei a security risk, a charge the company denies. Since then, Huawei has only sold limited batches of 5G models using stockpiled chips.

Stuck selling last-generation 4G handsets, Huawei fell from most rankings worldwide last year, when sales reached a low point, though it rose to a 10% market share in China in the first quarter, according to consultancy Canalys.

5G FORECASTS​

One of the research firms said it expected Huawei to use SMIC's N+1 manufacturing process, though with a forecast yield rate of usable chips below 50%, 5G shipments would be limited to around 2 million to 4 million units. A second firm estimated shipments could reach 10 million units, without providing further details.

Huawei shipped 240.6 million smartphones worldwide in 2019, its peak year, according to Canalys, before selling its Honor unit that accounted for nearly a fifth of shipments that year.

The state-backed China Securities Journal newspaper this month reported Huawei had raised its 2023 mobile shipment target to 40 million units from 30 million at the start of the year, without referencing a return to 5G phones.

Huawei could produce 5G versions of flagship models like the iPhone rival P60 this year, with new launches likely in early 2024, the three research firms said, adding they were basing such predictions on information they had received via checks with contacts in Huawei's supply chain and recent company announcements.

However, U.S. restrictions cut Huawei off from Google's Android operating system and the bundle of developer services upon which most Android apps are based, limiting Huawei handsets' appeal outside of China.

CHIP DESIGN TOOLS​

The research firms noted Huawei in March announced it had made breakthroughs in electronic design automation (EDA) tools for chips produced at and above 14 nanometre (nm) technology.

Chip design companies use EDA software to produce the blueprints for chips before they are mass manufactured at fabs.

The research firms, citing their own industry sources, believe Huawei's EDA software could be used with SMIC's N+1 manufacturing process to make chips at the equivalent of 7 nm, the powerful semiconductors typically used in 5G phones.

Washington barred SMIC from obtaining an advanced chipmaking tool called an EUV machine from Dutch firm ASML (ASML.AS) that is critical in the process of making 7 nm chips.

But some analysts have found signs SMIC has nevertheless managed to produce 7 nm chips by tweaking simpler DUV machines it could still purchase freely from ASML.

The second research firm said it noticed Huawei had asked SMIC to produce chip components below 14 nm this year for 5G products.

The forecast yield rate of less than 50% means that 5G chips are "going to be costly", said Doug Fuller who researches chips at the Copenhagen Business School.

"I guess if Huawei wants to eat the cost they can do this, but I don't see such chips as price competitive," Fuller said.

China's Huawei poised to overcome US ban with return of 5G phones, research firms say

China's Huawei Technologies is plotting a return to the 5G smartphone industry by the end of this year, according to research firms, signalling a comeback after a U.S. ban on equipment sales decimated its consumer electronics business.

www.reuters.com

 

[beijingwalker]

China's Huawei plans 5G smartphone return​

 

[kankan326]

China is winning tech war with US

 

[Oracle]

its not chip ban or hardware. huawei was getting better and better.
its google services which were banned for huawei phones causing it to crumble.

huawei phones will never rise again untill its phones will be allowed to use google services

 

[gambit]

Did you guys missed this in the article...

One of the research firms said it expected Huawei to use SMIC's N+1 manufacturing process, though with a forecast yield rate of usable chips below 50%, 5G shipments would be limited to around 2 million to 4 million units. A second firm estimated shipments could reach 10 million units, without providing further details.​

A per wafer yield rate of %50 means the manufacturing process is shiddy. To be profitable and RETAIN customers, the per wafer yield rate must be above %95, preferably hovering around %97-98. A %50 per wafer yield means the manufacturing process is not sophisticated and/or not as matured as competitors, not only that, whatever that yielded as 'good' dies are actually performance suspect because whatever that failed the other 1/2 of the wafer could be hidden in the other 1/2 and will reveal themselves when under stress. So when the device that is equipped with this supposedly 5G chip is under heavy use, the owner would be running below specs and not know it. More like 3G.

 

[jhungary]

its not chip ban or hardware. huawei was getting better and better.
its google services which were banned for huawei phones causing it to crumble.

huawei phones will never rise again untill its phones will be allowed to use google services

The chip ban have a very profound effect on Huawei device too, the ban from Qualcomm and Samsung means Huawai need to fall back on Kirin chipset which is at least 2 generation behind other phone, compare to other Chinese brand that can stay competitive (like Oppo) by keep using Sanpdragon Chipset.

But yes, I would agree the biggest issue here is google ban on Huawei. Without Google they cannot sell any phone internationally.

 

[antonius123]

The chip ban have a very profound effect on Huawei device too, the ban from Qualcomm and Samsung means Huawai need to fall back on Kirin chipset which is at least 2 generation behind other phone, compare to other Chinese brand that can stay competitive (like Oppo) by keep using Sanpdragon Chipset.

But yes, I would agree the biggest issue here is google ban on Huawei. Without Google they cannot sell any phone internationally.

Nope, the most advanced Kirin chipset was challenging the most advanced from Qualcomm and Apple/Bionic at that time before the ban.

It was due to the chip ban that prevent most advanced Kirin to be produced by TSMC and other chip foundries.

 

[jhungary]

Nope, the most advanced Kirin chipset was challenging the most advanced from Qualcomm and Apple/Bionic at that time before the ban.

It was due to the chip ban that prevent most advanced Kirin to be produced by TSMC and other chip foundries.

Sure, whatever you say.

 

[beijingwalker]

Did you guys missed this in the article...

One of the research firms said it expected Huawei to use SMIC's N+1 manufacturing process, though with a forecast yield rate of usable chips below 50%, 5G shipments would be limited to around 2 million to 4 million units. A second firm estimated shipments could reach 10 million units, without providing further details.​

A per wafer yield rate of %50 means the manufacturing process is shiddy. To be profitable and RETAIN customers, the per wafer yield rate must be above %95, preferably hovering around %97-98. A %50 per wafer yield means the manufacturing process is not sophisticated and/or not as matured as competitors, not only that, whatever that yielded as 'good' dies are actually performance suspect because whatever that failed the other 1/2 of the wafer could be hidden in the other 1/2 and will reveal themselves when under stress. So when the device that is equipped with this supposedly 5G chip is under heavy use, the owner would be running below specs and not know it. More like 3G.

That is the article's author's opinion, what will happen could be very different, western reports love to add their own opinion pieces on top of the reported stories.

 

[antonius123]

That is the article's author's opinion, what will happen could be very different, western reports love to add their own opinion pieces on top of the reported stories.

That make sense if China use DUV Lithography to produce 7nm. Because it require multipaterning that will produce more waste than using single paterning with EUV Lithography.

 

[beijingwalker]

Huawei plans return to 5G phones as China overcomes US chip curbs​

Huawei is reportedly gearing up to produce new 5G smartphones with a new domestic supply of semiconductors.
By Kurt Robson

Credit: Shutterstock / DANIEL CONSTANTE

Huawei is reportedly looking to return to the 5G smartphone industry by the end of the year, signifying China possibly overcoming recent US chip export restrictions.
Huawei Technologies, one of the largest Chinese tech giants, will soon be able to secure its own 5G chips domestically without the need for equipment from the US or its allies, several research firms told Reuters.

The news comes after Huawei’s business plummeted in 2020 when US restrictions began starving the company of essential semiconductor equipment.

Huwaei stated it was operating in “survival mode” in 2020, which continued for the next three years as company battled through the pandemic and restrictions.
The Chinese tech giant’s business revenue peaked at a whopping $67bn in 2020 but dropped by almost 50% in 2021.

Huawei has been stuck selling 4G handsets due to restrictions from the US and its allies, that have labelled the company a security risk.

However, several research firms told Reuters that Huawei had announced its breakthrough in electronic design automation (EDA) tools for semiconductor chips.
This means that the company may have had the blueprint to mass-produce powerful semiconductor chips for months.

According to the firms, Huawei’s EDA software could be used to make the chips needed to create 5G phones.

This means that Huawei could develop 5G models of its flagship iPhone rival P60, which is set to launch in 2024.

Although this will likely only interest Chinese audiences, as US restrictions locked the company out of all of Google’s services – which most Android phones operate on outside of China.

According to GlobalData thematic research, China will become the world’s leading semiconductor superpower on the basis of its growing domestic demand for chips by 2030.

The semiconductor industry is predicted to double in size to more than $1trn by the end of the decade, and China will account for approximately 60% of that growth, according to the Semiconductor Industry Association and Boston Consulting Group.

Josep Bori, thematic research director at GlobalData, previously toyed with the idea that US bans may lead to China reaching chip self-sufficiency at a quicker pace.

“It is anybody’s guess whether an unintended consequence of the US export restrictions will be that China will achieve semiconductor manufacturing self-sufficiency earlier than previously expected,” Bori told Verdict.

Huawei plans return to 5G phones as China overcomes US chip curbs

Huawei is reportedly looking to return to the 5G smartphone industry by the end of the year, despite US chip export restrictions.

www.verdict.co.uk

 

[kankan326]

its not chip ban or hardware. huawei was getting better and better.
its google services which were banned for huawei phones causing it to crumble.

huawei phones will never rise again untill its phones will be allowed to use google services

But yes, I would agree the biggest issue here is google ban on Huawei. Without Google they cannot sell any phone internationally.

Samsung and Iphone sell 200 million phones each year. China has at least 300 million population that are affordable and willing to buy expensive phones. China can also issue laws to limit Apple sale in China. Which will guarantee Huawei to sell most expensive phones in the world.

What is "international market" about for expensive phone? How many people can afford Iphone in Africa+South Asia+ Latin America? For expensive phones, China alone has equivalent consumption power to the "international market"

 

[beijingwalker]

Sources: US Chip CEOs Plan Washington Trip to Talk China Policy​

July 14, 2023 11:11 PM

• Reuters

The chief executives of Intel Corp and Qualcomm Inc are planning to visit Washington next week to discuss China policy, according to two sources familiar with the matter.

The executives plan to hold meetings with U.S. officials to talk about market conditions, export controls and other matters affecting their businesses, one of the sources said. It was not immediately clear whom the executives would meet.

Intel and Qualcomm declined to comment, and officials at the White House did not immediately return a request for comment.

The sources said other semiconductor CEOs may also be in Washington next week. The sources declined to be named because they were not authorized to speak to the media.

U.S. officials are considering tightening export rules affecting high-performance computing chips and shipments to Huawei Technologies Co Ltd, sources told Reuters in June. The rules would respectively affect Intel, which is preparing a new artificial intelligence chip that could be shipped to China, and Qualcomm, which has a license to sell chips to Huawei.

The Biden administration last October issued a sweeping set of rules designed to freeze China's semiconductor industry in place while the U.S. pours billions of dollars in subsidies into its own chip industry.

The possible rule tightening would hit Nvidia particularly hard. The company's strong position in the AI chip market helped boost its worth to $1 trillion earlier this year.

The chip industry has been warmly received in Washington in recent years as lawmakers and the White House work to shift more production to the U.S. and its allies, and away from China. Intel CEO Pat Gelsinger and Qualcomm CEO Cristiano Amon have met often with government officials.

Next week's meetings, which one of the sources said could include joint sessions between executives and U.S. officials, come as Nvidia Corp NVDA.O and other chip companies fear a permanent loss of sales for an industry with large amounts of business in China while tensions escalate between Washington and Beijing.

One of the sources familiar with the matter said the executives' goals for the meetings would be to ensure that government officials understand the possible impact of any further tightening of rules around what chips can be sold to China.

Many U.S. chip firms get more than one-fifth of their revenue from China, and industry executives have argued that reducing those sales would cut into profits that they reinvest into research and development.

Sources: US Chip CEOs Plan Washington Trip to Talk China Policy

Executives plan to hold meetings with officials to talk about market conditions, export controls and other matters affecting their businesses

www.voanews.com

 

[jhungary]

Samsung and Iphone sell 200 million phones each year. China has at least 300 million population that are affordable and willing to buy expensive phones. China can also issue laws to limit Apple sale in China. Which will guarantee Huawei to sell most expensive phones in the world.

What is "international market" about for expensive phone? How many people can afford Iphone in Africa+South Asia+ Latin America? For expensive phones, China alone has equivalent consumption power to the "international market"

This is like people saying "We have the same amount of market when you are selling cheap"

Let's do some simple math

200 million x 1500 per phone = 300 billions
300 million x 400 per phone = 120 billions.

Setting aside what we are talking about is the technological gap. Not international market.

 

[kankan326]

This is like people saying "We have the same amount of market when you are selling cheap"

Let's do some simple math

200 million x 1500 per phone = 300 billions
300 million x 400 per phone = 120 billions.

Setting aside what we are talking about is the technological gap. Not international market.

I said expensive phones only. Read my comment again. Part of Samsung phone sale are cheap phones.