Shares of Chinese chipmakers and their suppliers surged on Wednesday (August 31) after Huawei Technologies, which had been subjected to sanctions by the United States, launched a flagship smartphone using a self-developed central processing unit (CPU).
Due to speculation that China might have leapfrogged in chip-making technology, shares of Guangdong Leadyo IC Testing rose 19.99% on Wednesday morning, triggering the suspension of the stock’s trading. Shares of Biwin Storage Technology increased 11.64% while those of Cambricon Technologies Corp gained 9.52%.
On August 30, Huawei unexpectedly announced its plan to sell the Mate60 Pro, which is marketed as a 4G phone but can run on 5G. Chinese media suggested Huawei avoided the term “5G” to prevent facing more US curbs.
A Huawei spokesman declined to comment on Mate60 Pro’s components but called the handset “the most powerful Mate model ever.” Industry sources familiar with the rollout of Huawei’s new handset told Asia Times that it is indeed 5G-capable.
Sales of the new phone started at noon on on August 30, two weeks ahead of a planned Huawei marketing event on September 12, which will coincide with the launch date of Apple’s new iPhone 15.
The new Huawei phone, priced at 6,999 yuan (US$961), was sold out immediately. A gadget expert surnamed Yang reported upon examination that the phone’s CPU is an octa-core HiSilicon 5nm chipset known as Kirin 9000s.
He said its serial number “2035-CN” means that the chipset was produced on the 35th week of 2020 in China, a week before Taiwan’s TSMC stopped making chips for HiSilicon on September 15 that year at the United States’s request.
Inventory or new chips?
On that day, Taiwan’s TSMC stopped producing Kirin chips, resulting in a drawdown of HiSilicon’s chip inventory. In the third quarter of last year, HiSilicon saw its global smartphone chipset market share fall to zero from 0.4% in the second quarter, meaning that it had depleted all of its inventory, according to Counterpoint Research, a hardware consultancy firm.
But in June last year, media reports said Huawei still had some Kirin 9000 chips and planned to use them in the Mate50 Pro, though it reportedly eventually dropped the plan. Some Chinese IT columnists believe that the Kirin 9000s chipsets are purely inventory chips made by TSMC.
Zhang Rui, a Shenzhen-based technology writer, says in an article published on Wednesday that just before September 15, 2020 TSMC had delivered about 10 million units of unpackaged Kirin 9,000e chips to Huawei, plus 4.5 million packaged ones to make the Mate40 Pro. He said the Kirin 9,000s model could be modified from Kirin 9,000e.
However, an information technology writer pointed out that the latest chipset’s four small cores used ARM’s cortex-a510 architecture, which was only available in June 2021.
He said SMIC may have been involved in making the Kirin 9000s. He suspected that the chips might have come from a batch of semi-finished TSMC wafers, which were later processed by SMIC.
Since 2019, Semiconductor Manufacturing South China Corp (SMSC), a SMIC subsidiary, has accelerated research into using immersion deep ultraviolet (DUV) lithography to make 7nm chips.
In October 2020, SMSC successfully used its FinFET N+1 process to make 10nm chips, which were reputed to be equivalent to 7nm chips in performance.
But the company said at the time that the chips can only be used in low-energy processors and that it needs to develop N+2 technology in order to make high-energy processors. It’s unclear whether or when SMSC has made such a breakthrough.
A Sichuan-based gadget fan says he expects Huawei to explain in its marketing event on September 12 how it made the Kirin 9,000s.
China’s funding
Mate60 Pro sales were announced after US Commerce Secretary Gina Raimondo rejected Chinese Commerce Minister Wang Wentao’s call to lift the US chip export ban against China while in Beijing. “There is no room to compromise or negotiate in matters of national security,” Raimondo said on Monday.
On Tuesday, Premier Li Qiang called upon her to reduce US export controls on technology and to retract an order by President Joe Biden that restricts US firms and funds from investing in China’s high technology sectors. Raimondo said she rebuffed the appeal.
Meanwhile, China continues to increase its efforts to make high-end chips and lithography tools.
Citing the Washington-based Semiconductor Industry Association, Bloomberg reported on August 23 that Huawei is receiving an estimated US$30 billion in funding from the central and Shenzhen governments to make chips. The company has acquired at least two existing chip foundries and is building at least three others, the SIA said.
The Commerce Department’s Bureau of Industry and Security (BIS) said it is monitoring the situation and is ready to take action if necessary. The BIS has already blacklisted dozens of Chinese tech companies including Fujian Jinhua Integrated Circuit Co and Shenzhen’s Pengxinwei IC Manufacturing Co (PXW).
Last October, Pengxinwei, set up by a former executive of Huawei known as Zhou Jin in 2021, got the BIS’s attention on reports it would supply chips to Huawei. Pengxinwei will start producing 28nm chips in 2025 while Fujian Jinhua will make DRAMs.
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Follow Jeff Pao on Twitter at @jeffpao3