Tag: SMIC

  • 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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