Huawei Technologies, a Shenzhen-based telecommunication maker, is reportedly struggling to secure enough high-end chips for the next version of its Mate70 flagship smartphone, the latest upshot in the US-initiated chip war on China.
Huawei and its local chip-making partner, Semiconductor Manufacturing International Corp (SMIC), both sanctioned by the US, had planned to make 2.5 million chips before releasing the Mate70 for a September product launch, but failed to meet the target due to limited manufacturing capacity and productivity issues, The Information reported.
The Information report said the root cause of the missed target is the “continuing impact of a four-year-old US ban on the supply of chip manufacturing tools to Huawei and SMIC.”
Observers had previously anticipated that Huawei would launch the Mate70 phone in China on September 10, a day after Apple Inc unveiled the iPhone16 in the US on September 9. But Chinese media said the Mate70 phone is now expected to be launched in November instead.
The Information said Huawei may still choose to unveil its Mate70 next week, but the number of phones immediately available for sale will be limited.
It said the company will let customers pre-order and wait for delivery—a tactic similar to that used in the launch of the Mate60 Pro in late August last year, when US Commerce Secretary Gina Raimondo was visiting Beijing.
In September 2023, Raimondo, the lead US official behind the chip war, said she was “upset” by the launch of Mate60 Pro, which is powered by 7nm Kirin 9000s chips and showed China had found workarounds on US high-end chip bans.
She told a US House of Representatives hearing that her team did not have any evidence that China can make 7nm chips at scale. Last October, she told the Senate that the launch of Mate60 Pro was “incredibly disturbing.”
If the Mate70 is indeed launched in November, Raimondo may avoid being grilled by lawmakers before the US presidential elections on November 5.
Chinese IT websites reported on Thursday (September 5) that Huawei will unveil the world’s first triple-fold smartphone, known as Mate XT, at a marketing event on September 10. They said the long-awaited Mate70 or Mate70 RS will not be unveiled at the event.
Cailian Press, a Chinese financial news agency, reported citing unnamed sources on August 28 that Huawei will launch the Mate 70 in November. It claimed the smartphone will use HarmonyOS NEXT, an operating system developed by Huawei without Android code, and a new Kirin processor.
It is widely expected that the Mate70 will use a 7nm chip known as Kirin 9100.
A Guangdong-based IT columnist says there are several versions of Kirin 9100, but even the lowest-end one has a performance equivalent to Qualcomm’s Snapdragon 8+ Gen 1 processor. The columnist claims that Kirin 9100 can achieve video smoothness similar to that of Snapdragon 8 Gen 2 and 3 processors.
Limited production capacity
Since 2019, the US has asked ASML, the world’s largest chip equipment supplier based in the Netherlands, to stop shipping extreme-ultraviolet (EUV) lithography machines to China. EUV lithography can make 7nm chips in a single exposure and 2-3nm chips in multiple exposures.
A team led by Liang Mong-Song, managing director of SMIC and a former engineer at TSMC and Samsung, later successfully made 7nm chips using deep-ultraviolet (DUV) lithography machines and multiple exposure techniques.
In June this year, The Information reported that Huawei had faced obstacles in manufacturing its Ascend 910B, a 7nm chip that is said to be equivalent to 80% of Nvidia’s A100 in terms of AI-training efficiency. It said the situation was a result of the US Commerce Department’s chip export controls.
However, a calculation made by Asia Times using public figures showed that Huawei can still easily finish its target of making 400,000 to 500,000 Ascend 910B chips this year even if its yield is as low as 20%. In case Huawei needs more capacity to make AI chips, it can reduce the production of HiSilicon’s Kirin chips.
It remains unclear whether Huawei and SMIC have slowed the production of Kirin chips to accommodate Ascend 910B.
Despite a difference in yield, SMIC’s capabilities are only three years behind TSMC’s, based on the performance of the Chinese chips that were shipped, according to Hiroharu Shimizu, CEO of Tokyo-based TechanaLye, a semiconductor research company that disassembles and analyzes 100 electronic devices a year.
Shimizu told Nikkei in an interview last month that HiSilicon’s design capabilities have also improved, given that its 7nm chips perform comparable to TSMC’s 5nm products.
More chip export rules
Since the beginning of this year, the Dutch government has stopped granting licenses for ASML to export its NXT:2000i and subsequent DUV immersion systems to China.
On Friday, the Dutch government said ASML will need to apply for export licenses with it rather than the US government for shipments of its older machines – NXT:1970i and 1980i DUV immersion lithography systems. The new rule will take effect on September 7.
“I am making this decision for our security. We see that technological developments are creating more safety risks when exporting this specific production equipment. Especially in the current geopolitical climate,” Dutch Foreign Trade Minister Reinette Klever said in a statement on Friday.
“The Netherlands has a unique and leading position. That comes with a responsibility that we must take seriously,” he said.
“The extension of the licensing requirement concerns specific equipment that is only made by a very limited number of companies in the Netherlands,” Klever said. “The licensing requirement concerns a small part of the total product portfolio of the companies that fall under this scheme.”
ASML said the updated license requirement is only a technical change that is aimed at “harmonizing the approach for issuing export licenses.” Some media reports said the Hague will assess export license applications “on a case-by-case basis” while China may be the target of this new rule.
38+ country coalition
On Thursday, the US Commerce Department’s Bureau of Industry and Security (BIS) announced new export controls on quantum computers, advanced chip-making equipment and Gate All-Around Field-Effect Transistor (GAAFET) technology that can be used to make chips for supercomputers.
The BIS said in a press release that it has worked diligently to build international relationships with like-minded countries and form a 38-country coalition to strengthen the effectiveness of export controls in degrading Russia’s military capabilities and its enablers, such as Belarus and Iran.
The press release did not mention China but all the curbs are apparently pointing at the country. Mao Ning, a spokesperson of the Chinese Foreign Ministry, on Friday criticized the US for weaponizing and politicizing economic issues and disrupting global supply chains.
Read: China threatens chip war retaliation against Dutch, Japanese
Follow Jeff Pao on X: @jeffpao3
its true – because the sales of the mate 70 exploded so much its caught huawei by surprise and the demand has totally outpaced the supply …
Lots of hearsays and conjectures from this author predicting the US winning over Huawei in the past and all have been debunked. Not sure if this article will be any different.
High end chips are not the most important part of the market market.
A lot of rumors and speculation about what SMIC and Huawei can do. They proved others wrong before – so we shall see.