Tag: SMIC

  • Huawei Developing Two New 3nm Chips for Future Devices

    Huawei Developing Two New 3nm Chips for Future Devices

    Key Takeaways

    1. SMIC has successfully produced its first 5 nm chip, the Kirin X90 for Huawei, using DUV machines due to trade restrictions on EUV technology.
    2. Huawei is researching a 3 nm chip using GAA FET technology, aiming for tape-out by 2026 and mass production by 2027.
    3. Yield rates for the 5 nm chip are low at 20%, and the 3 nm chips are expected to have even lower rates due to complex DUV multi-patterning.
    4. China is investing in developing its own EUV machines, with reports suggesting Huawei is testing EUV technology for potential mass production by 2026.
    5. Advancements in EUV technology are likely to be kept secret, with significant funding of $37 billion allocated for its development.

    If the whispers from China are true, SMIC has made a significant breakthrough by producing its first 5 nm chip for Huawei, named the Kirin X90. This accomplishment was achieved without the advanced EUV machines from ASML. Instead, they relied on less powerful DUV machines due to trade limitations. A recent article from UDN sheds light on Huawei’s upcoming strategies regarding its semiconductor sector.

    Future Semiconductor Developments

    Huawei is now delving into research for a 3 nm node based on GAA FET technology, which they expect to have ready for tape-out around 2026. If everything goes as planned, they aim to kick off mass production by 2027. In addition, there are also investigations into carbon nanotube-based 3 nm chips, though there’s no update on their development status.

    Challenges Ahead

    Yet, yield rates will remain a concern. The aforementioned 5 nm node reportedly has a low yield rate of just 20%, and this number is expected to decline even further for the 3 nm chips due to the increased complexity of DUV multi-patterning. However, this situation could improve if China manages to transition to EUV technology like TSMC, Samsung, and Intel Foundry.

    China is already putting effort into creating its own EUV machines. An X user, @zephyr_z9, who has insights into the Chinese semiconductor industry, notes that Huawei is testing EUV technology, which is anticipated to be ready for mass production by 2026. On the other hand, former ASML engineer @lithos_graphein argues that this is improbable, stating, “ASML’s moat is massive and uncontested.”

    Secrecy in Progress

    Still, even if China had EUV tools available, they likely wouldn’t make this information public. Reports indicate that $37 billion has been designated for the development of EUV technology, and any advancements will likely be kept secret, similar to what occurred with the Kirin 9010 and its later versions.

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  • SMIC Yield Issues Rise Due to U.S. Sanctions on Tool Servicing

    SMIC Yield Issues Rise Due to U.S. Sanctions on Tool Servicing

    Key Takeaways

    1. SMIC expects a revenue dip of up to 6% in Q2 due to equipment maintenance disruptions.
    2. U.S. export restrictions have forced unqualified SMIC engineers to manage advanced tool maintenance, increasing risk of further disruptions.
    3. In Q1 2025, SMIC reported $2.247 billion in revenue, a 1.8% increase, primarily driven by wafer sales.
    4. Equipment issues have diverted $30 million to $75 million from R&D, but SMIC maintains a $7.5 billion capital expenditure plan.
    5. Co-CEO Haijun Zhao noted that tariff impacts on revenue are minimal, but increasing prices may affect demand later in the year.

    Semiconductor Manufacturing International Corporation (SMIC) is expecting a revenue dip of up to six percent for the second quarter due to disruptions from equipment maintenance and validation. A mishap during their annual maintenance, along with problems found in newly set up tools, has led to a decrease in sellable output, without affecting the average selling prices.

    Maintenance Challenges

    U.S. export restrictions preventing American suppliers from servicing advanced wafer fabrication tools in China have compelled SMIC engineers, who don’t have formal qualifications for some tasks, to handle maintenance themselves. This situation raises the risk of further disruptions and could lead to lower yield quality.

    First Quarter Performance

    In the first quarter of 2025, SMIC reported revenue of $2.247 billion, reflecting a 1.8 percent increase from the previous quarter. Wafer sales made up 95.2 percent of this total, thanks to an 18 percent rise in shipments of 200-millimeter wafers and a two percent growth in 300-millimeter volumes. Factory utilization increased to 89.6 percent, helping to mitigate the effects of lower unit prices and rising depreciation costs on profit margins.

    Financial Implications

    Addressing the issues with the faulty equipment has already redirected between $30 million and $75 million from research and development. Nevertheless, management is sticking to a bold $7.5 billion capital-expenditure plan for the year. Executives believe the current impact of tariffs is “minor,” although they admit that increased prices downstream might limit demand in the latter half of the year.

    Co-CEO Haijun Zhao mentioned that close collaboration with partners and received tariff exemptions have helped to keep the direct revenue impact from trade policies below one percent. The company is still closely watching customer demand due to the ongoing geopolitical uncertainties.

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  • China Achieves 5nm Chip Tech Without EUV: SMIC Defies Sanctions

    China Achieves 5nm Chip Tech Without EUV: SMIC Defies Sanctions

    Key Takeaways

    1. SMIC has successfully produced 5nm chips using older DUV equipment instead of EUV lithography.
    2. The technique employed is called Self-Aligned Quadruple Patterning (SAQP), which simulates EUV accuracy.
    3. This achievement challenges the belief that EUV is essential for producing advanced chips below 7nm.
    4. The production process is more time-consuming, error-prone, and costly but has resulted in functional 5nm-class chips.
    5. The new chips are already integrated into devices like the Huawei Mate 60, outperforming competitors with features like satellite call capabilities.

    In a significant development that could transform the worldwide semiconductor market, China’s Semiconductor Manufacturing International Corporation (SMIC) has seemingly succeeded in producing 5nm chips without relying on extreme ultraviolet (EUV) lithography.

    Innovative Techniques Used

    Instead, SMIC has employed older deep ultraviolet (DUV) equipment, combined with a complex technique called Self-Aligned Quadruple Patterning (SAQP). This achievement, highlighted in several tweets by semiconductor expert William Huo on X, represents not just a technological advance but also a bold message in the realm of geopolitics.

    Overcoming Challenges

    Traditionally, the industry has believed that EUV lithography, which is only available from the Dutch firm ASML, was essential for producing chips at 5nm and lower. With the limitations on EUV access imposed by the U.S. and its partners, many experts thought that China would be unable to progress beyond the 7nm level. However, SMIC has managed to forge ahead, using intensive DUV methods to extract every possible nanometer from their older equipment.

    Results of the Breakthrough

    According to Huo, this process involved layering several lithography and etching steps, particularly utilizing SAQP to simulate the accuracy of EUV. Although this technique is more time-consuming, prone to mistakes, and costly, it proves effective. The outcome? A functioning 5nm-class chip, which is reportedly already integrated into devices such as the Kirin 9000S-powered Huawei Mate 60, that notably outperformed the iPhone 15 by providing satellite call capabilities first.

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  • Huawei Ascend 920: Nvidia H20 Replacement Expected This Year

    Huawei Ascend 920: Nvidia H20 Replacement Expected This Year

    Key Takeaways

    1. Huawei is finding new ways to obtain advanced hardware for AI training despite TSMC blocking its chip production efforts.
    2. The newly released Ascend 910C shows potential to compete with Nvidia, but has significant limitations.
    3. The Ascend 920 chip is expected to launch soon, built using SMIC’s 6 nm class N+3 technology, with mass production starting in the latter half of 2025.
    4. The Ascend 920 is designed to deliver 900 TFLOPS of BF16 performance and 4,000 GB/s memory bandwidth with HBM3 memory.
    5. SMIC’s 6 nm class node may also be used in future products like Kirin chips for Huawei smartphones, with whispers of a developing 5 nm class node.

    Even with TSMC blocking Huawei’s efforts to produce its Ascend 910B chips using advanced technology, the large Chinese company has discovered new methods to obtain top-tier hardware for AI training. The Ascend 910C was released shortly after that setback, and a detailed analysis from SemiAnalysis indicates that it has the potential to compete with Nvidia, though there are several important limitations. Recently, a report from DigiTimes indicates that its successor, the Ascend 920, is expected to launch soon.

    Manufacturing Insights

    Well-known leaker Jukanlosreve on X has shared that the Ascend 920 will be built using SMIC’s 6 nm class N+3 technology. Mass production is set to begin in the latter half of 2025. The chip is said to deliver 900 TFLOPS of (presumably) BF16 performance and boasts a memory bandwidth of 4,000 GB/s, made possible by HBM3 memory. It is designed to replace Nvidia’s Hopper-based H20 chip, which has recently been banned for use in China.

    Future Developments

    The introduction of the Ascend 920 also marks the debut of SMIC’s new 6 nm class node, which is likely to be implemented in other products, including Kirin chips for Huawei smartphones. Although the previously anticipated Kirin 9100 didn’t succeed, there are indications that it may still launch later this year. Additionally, there have been whispers about a 5 nm class SMIC node under development, but advancements in that area may be sluggish due to limited access to EUV machinery.

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  • Huawei Outsmarts US Chip Ban: Report on Breakthrough Chip Utilizing US Tech

    Huawei Outsmarts US Chip Ban: Report on Breakthrough Chip Utilizing US Tech

    Despite facing restrictions from the United States on providing advanced chip technology to China, Huawei successfully developed a more potent chip for its Mate 60 Pro smartphone by leveraging technology from American companies.

    Utilization of US Technology by Huawei and SMIC

    An earlier report highlighted SMIC's utilization of ASML's technology in the past. Recent reports from Bloomberg reveal that Huawei, in collaboration with its chip manufacturing partner SMIC, incorporated technology from Applied Materials and Lam Research, both based in California, to craft a 7-nanometer chip. While not the most cutting-edge chip in existence, it outperforms what the US had intended for its rival in the ongoing chip conflict. This development follows a previous Bloomberg report from October 2023, which mentioned SMIC using ASML's technology for a different advanced Huawei chip.

    Acquisition of US Technology by SMIC

    SMIC purportedly acquired the US technology before the US Department of Commerce enforced a ban in October 2022. This ban aimed to prevent US companies from supplying advanced chipmaking equipment and chips to Chinese entities. Subsequent restrictions in November 2022 further hindered equipment sales approvals to Huawei and other Chinese firms, citing national security reasons.

    Impact on Market Demand

    Although there is no conclusive evidence from the US Commerce Department regarding SMIC's mass production of these advanced chips, Huawei witnessed robust initial demand for its Mate 60 series in the first six weeks of 2024. Concurrently, Apple experienced a notable 24% decline in iPhone sales in China during the same period, while overall smartphone sales in China decreased by 7%.

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  • Revenue Decline and Profit Drop in 2023 Await Chinese Chip Maker SMIC

    Revenue Decline and Profit Drop in 2023 Await Chinese Chip Maker SMIC

    SMIC, one of China’s leading semiconductor manufacturers, faces a mixed bag in its financial performance for the year 2023 and the beginning of 2024. Despite challenges, including weak global demand and intense competition, the company remains a key player in the semiconductor industry.

    Decline in Revenue and Net Income

    In 2023, SMIC experienced a decline in revenue, dropping from $7.27 billion in 2022 to $6.32 billion, marking a significant decrease. Net income followed suit, plummeting by 50.4% to $902.5 million compared to the previous year. Factors contributing to this slump include weak global market demand, high industry inventory levels, and fierce competition within the semiconductor sector.

    However, there were glimmers of hope in the fourth quarter of 2023. SMIC witnessed a 3.5% increase in revenue year-on-year, reaching $1.68 billion. This uptick was attributed to strong demand for Huawei Technologies’ Mate 60 series 5G smartphones, which utilized processors manufactured by SMIC. Despite this positive development, SMIC’s quarterly net profit declined by 55% compared to the previous quarter, falling to $174.68 million.

    Outlook for 2024

    Looking ahead to 2024, SMIC’s outlook remains cautious. The company expects its revenue growth to align with the industry average, with no significant rebound anticipated. Factors influencing this outlook include the gradual improvement in client inventory levels and the rising demand for smartphones and internet services. However, SMIC remains wary of potential challenges, including uncertainties in the global economic landscape.

    Regional Revenue Distribution and Breakdown by Applications

    Regionally, China continues to dominate SMIC’s revenue distribution, accounting for 80.8% of total revenue in the fourth quarter of 2023. Despite this, there was a slight decrease from the previous quarter, with revenue from the US increasing to 15.7% of the total.

    Revenue breakdown by applications reveals that smartphones, computers, and tablets remain the largest revenue sources for SMIC, comprising 60.8% of total revenue in the fourth quarter. However, the consumer electronics segment experienced a slight decline in revenue, reflecting slow demand in this sector.

    Partnerships and Technological Prowess

    Despite challenges, SMIC’s involvement with Huawei in developing advanced chips for the Mate 60 series highlights the company’s technological prowess and its ability to secure significant partnerships in the industry. However, SMIC’s cautious approach to recovery reflects the ongoing uncertainties in the semiconductor market.

    SMIC’s financial performance in 2023 reflects both challenges and opportunities in the semiconductor industry. While the company faces headwinds such as weak global demand and intense competition, it remains resilient and poised to capitalize on emerging opportunities in the market.

    Revenue Decline and Profit Drop in 2023 Await Chinese Chip Maker SMIC
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  • China’s SMIC Set to Commence Manufacturing 5nm Chips for Huawei, States New Report

    China’s SMIC Set to Commence Manufacturing 5nm Chips for Huawei, States New Report

    Huawei’s smartphone sales experienced a significant boost last year, thanks to the popularity of the Mate 60 series featuring their Kirin 9000S chip.

    Huawei’s Need for a More Powerful Chip

    While the Kirin 9000S, built on a 7nm process, may not be the top-performing smartphone SoC, its in-house development is a notable achievement for Huawei. However, the company now requires a more powerful and efficient chip for its upcoming smartphone models.

    Huawei Aims for 5nm Chip Production

    According to a report by the Financial Times, Huawei is now targeting 5nm chip production. Its partner, SMIC, China’s largest chipmaker, has established a new semiconductor line in Shanghai dedicated to producing chips designed by Huawei.

    Export Restrictions and National Security Concerns

    The move comes as the Biden administration has imposed stricter export restrictions on advanced chipmaking equipment due to national security concerns. Additionally, the US government is collaborating with the Netherlands and Japan to make it more difficult for China to access cutting-edge chip manufacturing equipment.

    Challenges for SMIC

    For now, SMIC is reportedly repurposing its existing DUV equipment for 5nm chip production. However, this approach may result in lower yields and higher costs of SoCs.

    China’s Semiconductor Industry Progress

    While Huawei’s 5nm chip may not be able to compete with flagship chipsets from Qualcomm or MediaTek, it is important to recognize that China’s semiconductor industry continues to make progress despite the US ban. Manufacturing a 5nm chip without relying on foreign support would be a significant achievement for both Huawei and SMIC.

    Huawei’s Future Plans

    An insider familiar with the plans stated, “With the new 5nm node, Huawei is well on track to upgrade its new flagship handset and data center chips.”

    Huawei is rumored to be using the upcoming Kirin SoC in the P70 series of smartphones. Additionally, the company is actively working on Harmony OS NEXT, a new generation operating system built on Huawei’s proprietary kernel. The OS will also completely abandon Android app support.

    • China's SMIC Set to Commence Manufacturing 5nm Chips for Huawei, States New Report
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