Huawei's Chip Resurgence: A Challenge to Western Sanctions and a Test for China's Tech Prowess
In the high-stakes game of global tech, every move is calculated and every player is under scrutiny.
Coffee Guff
October 28, 2023
In the high-stakes game of global tech, every move is calculated and every player is under scrutiny. Enter Huawei: once the darling of China's tech scene, later the target of U.S.-led sanctions. As the dust begins to settle, a phoenix-like resurgence beckons. Dive into our deep dive on Huawei's audacious comeback in the semiconductor arena, a narrative that isn't just about chips, but geopolitics, resilience, and the future of global tech dominance. Are we witnessing a mere blip or the dawn of a new era? Let's decode together.
Tech Deep Dive
Huawei's Chip Resurgence: A Challenge to Western Sanctions and a Test for China's Tech Prowess
Semiconductors, the brains behind modern electronics, are intricate devices made from silicon wafers. The process involves multiple steps, including doping to introduce impurities into the silicon and lithography to etch patterns into the wafer. Key suppliers in this space include ASML for advanced lithography tools and NVIDIA for graphics processing units.
Huawei, once the poster child of China's tech ascendancy, has been under the microscope since 2019, facing U.S.-led sanctions that severed its supply chain. Both Huawei and China's Semiconductor Manufacturing International Corporation (SMIC) found themselves on the U.S. Entity List, effectively cutting off access to advanced chips. But Huawei's recent launch of its Mate 60 Pro smartphone, featuring a 7nm Kirin 9000S processor, has rattled Western assumptions about China's semiconductor capabilities.
The Kirin 9000S chip, designed by Huawei's HiSilicon and manufactured by SMIC, is a technological leap, albeit one that still lags behind global leaders like Taiwan's TSMC and South Korea's Samsung. Questions remain about Huawei's ability to mass-produce these chips without Western technology, particularly given the absence of advanced Extreme Ultraviolet (EUV) lithography tools from Dutch firm ASML.
Huawei's strategy has been to use older technology as a stepping stone. The company has repurposed last-generation Deep Ultraviolet (DUV) lithography tools and other outdated tech to produce its new chipset. However, experts like Douglas Fuller point out that this approach results in poor yields, requiring multiple rounds of patterning to produce a 7nm chip.
The launch raises questions about the sustainability of Huawei's chip production, given the domestic shortage of advanced chip-making tools. It also serves as a litmus test for China's $40 billion Big Fund aimed at boosting its semiconductor industry, which has been marred by previous failures and corruption.
If Huawei succeeds in scaling its 7nm chip, it could not only regain its domestic market share but also challenge Western tech giants, further complicating the geopolitics of tech sanctions. Moreover, China's progress in indigenous lithography, albeit still in the lagging-edge, suggests that the country is slowly but surely climbing the tech ladder, leveraging its latecomer advantage and unique government-industry relationships.
The Huawei case underscores the limitations of Western sanctions in stifling China's tech ambitions. While the long-term viability of China's homegrown chips remains uncertain, dismissing its potential would be a strategic misstep for the West.
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