Huawei, the Chinese telecommunications giant, has been dealing with US government sanctions for more than four years. In May 2019, the US Department of Commerce placed Huawei on the entity list, essentially banning US companies from selling hardware and software to the company and cutting off its access to 5G chipsets. This move dealt a significant blow to Huawei’s business, as it heavily relied on US suppliers for its chipsets.
However, a recent report from Reuters suggests that Huawei may finally be able to use 5G chipsets that have been co-developed with China’s Semiconductor Manufacturing International Corporation (SMIC). The report indicates that Huawei and SMIC are developing 5G chipsets using SMIC’s N+1 manufacturing process and Huawei’s electronic design automation (EDA) software tools.
SMIC’s manufacturing process will be comparable to the 7nm process technologies of its competitors in terms of power and stability. Although it is not actually fabbed on a 7nm process. The yield rates for Huawei’s upcoming 5G chipsets will be below than 50%. And the forecasts suggest that the company may produce 2 to 4 million 5G chipset units initially. With a possibility of reaching 10 million units later on.
This development could be a significant breakthrough for Huawei. As it has been struggling to find alternative suppliers for its 5G chipsets since the US sanctions took place. Huawei’s own HiSilicon chipsets, which it had been using in its smartphones, were also subject of the ban. The company had been exploring alternatives, including MediaTek and Qualcomm. But they considered these options as not viable in the long run due to the geopolitical tensions between China and the US.
The first Huawei phone to launch with the newly developed 5G chipset will launch later this year. This could potentially give Huawei an advantage in the highly competitive smartphone market, where 5G capabilities are becoming increasingly important. However, it remains to be see how successful this partnership with SMIC will be. And how it will impact Huawei’s position in the market.