US Export Ban Threatens Huawei Mate 60 Pro and SMIC’s Future

KOMPAS.com – Huawei launched its new flagship cellphone, the Mate 60 Pro on the Chinese market at the end of last August.

Who would have thought, this cellphone made the US nervous and threatened to completely block the Chinese semiconductor manufacturer, Semiconductor Manufacturing International Corp (SMIC).

When the Mate 60 Pro was released, Huawei did not specify what chipset was used in its flagship cellphone. Later, the research company TechInsights discovered that the chip used in the Mate 60 Pro is the Kirin 9000s.

Like the rest of the Kirin series, the chip was designed by Huawei, in collaboration with SMIC. TechInsights analysts say that the Kirin 9000s has a 7 nanometer (nm) fabrication and supports fifth generation connectivity, aka 5G.

This chip is also said to be the first chip from SMIC designed with a 7 nm fabrication design. The reason is, the last most sophisticated chip ever made by SMIC was a 14 nm chip.

Also read: Huawei Mate 60 Pro Launches, Has 3 Front Camera Holes

After that, SMIC was hampered by making even more sophisticated chips because the company was on the US blacklist (entity list) since December 2020

Companies included in the list cannot be used haphazardly or are even prohibited from using US technology, except with permission from the US Department of Commerce.

Not only SMIC, Huawei has also been blacklisted by the US since May 2019 due to national security concerns. That way, US companies whose role is to supply components for Huawei products need special permission from the US Department of Commerce.

It should be noted that the trade restrictions imposed on Huawei and SMIC include the “Foreign Direct Product Rule.” This rule prohibits any company in the world from using US equipment to produce chips for Huawei.

But according to Reuters, suppliers Huawei and SMIC have received billions of dollars in licensing fees to sell US technology to the two Chinese companies, even though they are blacklisted. About 90 percent of the licenses were sold to SMIC.

In theory, SMIC no longer has direct access to various US technologies to produce chips with 10 nm architecture or more advanced, since it was blacklisted. For your information, the lower the architectural size of a chip, the more sophisticated it is.

This regulation also prohibits SMIC from using extreme ultraviolet lithography (EUV) machines, made by the Dutch company, ASML. This machine was also originally used to produce 7 nm chips or more sophisticated.

Also read: US Bans Investment in Chinese Tech Companies

Therefore, the appearance of the Kirin 9000s chip in the Huawei Mate 60 Pro with a 7 nm architecture made the US wonder how SMIC could make this chip even though there were blocking regulations.

Even though 7nm fabrication can be said to be lagging behind (Apple and Samsung have been using 7nm chips since 2018), this achievement marks significant progress for China’s semiconductor industry, which has recently been hampered by using US technology.

Apart from that, this achievement also slowly makes SMIC approach the capabilities of Taiwan Semiconductor Manufacturing Co (TSMC) or Samsung Electronics, which already have the ability to design chips with 3 nm and 4 nm architecture.

Call for a total ban on Huawei and SMIC

Because of these TechInsights findings, US DPR member Mike Gallagher called for the government to completely ban the export of any technology related to Huawei and SMIC.

Because according to him, the restrictions currently applied to Chinese companies are considered ineffective.

Regarding the chip in the Huawei Mate 60 Pro cellphone, Gallagher believes that this component cannot be produced without US technology. Therefore, he called for a total stop on technology exports to the two Chinese companies so that any company that violates them can be blocked from using US technology.

Also read: 15 Largest Semiconductor Companies in the World, There are Intel and Qualcomm

“This chip most likely cannot be produced without US technology and for that, SMIC may be violating the Department of Commerce’s export rules,” said Gallagher, quoted by KompasTekno from Reuters, Saturday (9/9/2023).

“The time has come to cut off all US technology exports to Huawei and SMIC,” he added.

Use DUV to make 7 nm chips

Last year, TechInsights said that SMIC had succeeded in producing 7 nm chips by modifying the Deep Ultraviolet (DUV) machine which is simpler and can be purchased freely from ASML.

Some analysts estimate that Huawei purchased such technology and tools to make the Kirin 9000s chip, rather than collaborating with SMIC.

Despite these allegations, analyst Tilly Zhang from Gavekal Dragonomics assesses that the practice is not as easy as expected, in fact the success rate is quite low for making advanced chips. Besides that, the costs are also greater.

A number of research companies are also skeptical about SMIC’s 7 nm fabrication process, assessing its success rate as below 50 percent compared to the normal limit of 90 percent or more. For this reason, they predict that SMIC can only ship around 2 million – 4 million chips.

This amount is projected to be very insufficient for Huawei to regain its dominance in the world smartphone market.

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2023-09-09 03:00:00
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