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Huawei and the 7nm Chip; A Step Closer in Achieving Self-Sufficiency ?: By Sapna Elsa Abraham

Updated: Oct 3, 2023

Image courtesy: Bloomberg

Article 30/2023

Huawei Technologies, a Chinese company launched its latest 5G smartphone Mate 60 Pro. A deep analysis was carried out by the Canada based research firm, Tec Insights revealed that the chip HiSilicon Kirin 9000s (Hi360Ao) used in the newly launched phone have been manufactured in China by a partially state-owned and the country's leading semiconductor manufacturing company Semiconductor Manufacturing International Corp (SMIC).

The SMIC’s 7nm processing node is a next generation advanced chip manufactured within China. A year before, the same research firm had reported SMIC to have achieved the feat in advanced semiconductors by the production of a 7nm chip or N+2 chip for MinerVA bitcoin mining company. This was considered to be a major breakthrough for China to enter into the most advanced chip manufacturing. At that time, speculation regarding the commercial viability of the 7nm processing node was under question. The news of the SMIC 7nm advanced chip being used in Huawei’s latest 5G handset has partly answered the question of commercial viability and the ability of Chinese companies to produce advanced chips under heavy export restrictions by the USA.

The 7nm Chip is considered to be a steppingstone into the next generation Chips and it is very important for the latest mobiles and handset devices and process industry as it provides more power and performance to the device and an important component in 5G handsets. For the manufacturing of next generation process nodes, a major step required is Lithography. Lithography is the most important processing technology of integrated circuits and the most critical technology for manufacturing chips as its precision determines the manufacturing process of the chip and the performance of the device. For the Manufacturing of this next gen chip, the most advanced lithography tool available is Extreme Ultraviolet Lithography (EUV), the preferred and the widely used technology.

To the contrary, SMIC is believed to have used an older generation lithography tool, the Deep ultraviolet lithography tool (DUV) to manufacture the latest chip. This is due to the restrictions that have been placed by the United States of America (USA) over the most advanced technology and chips to be transferred to China since the Chip war between US and China has been on a rise. One major component falling under the restrictions are the advanced EUV lithography tools produced by ASML, a company from the Netherlands. Hence China has been relying on an older generation lithography tool DUV technology and multi patterning for the production of the latest Chip produced by SMIC. Even though China achieved this feat by using an older generation of lithography, it is not impossible for them to produce more of these chips using the DUV technology according to industry experts. According to Mr. Arun Mamphazy, a semiconductor expert, theoretically, China can produce much more advanced chips, 5nm or even less with DUV lithography tool and multipatternin, the practicality of doing so is what makes it difficult.

The fact that a Chinese company was able to produce next gen processing nodes even without the availability of the critical technology is a matter that China would want to boast about in front of the world. Amidst the changing geopolitical landscape, countries find it critical to try and achieve a local semiconductor ecosystem and achieve self-sufficiency to ensure their supply and production of these chips. Countries are trying to achieve self-sufficiency in the production of indigenous chips in their own backyard. This has resulted in a fierce chip war between USA and China over achieving self-sufficiency, with US trying to restrict the access to the latest chips and critical equipment to China over security concerns and China trying to overcome these restrictions being imposed over them.

US and Huawei technology went through a major backlash in USA and Huawei was accused of spying and taking sensitive information from US consumers. In 2019, sanctions were placed over Huawei which was a leading 5G handset manufacturer at that time from access to essential chipmaking tools to produce the most advanced handset models. Which resulted in the company relying on stockpiled chips. Huawei was cut off from chip manufacturers like Taiwan Semiconductor Manufacturing Company Limited TSMC which took a toll on the production of new 5G handsets without the most advanced chip. With the launch of the new 5G phone and a next generation chip produced in China, it will be a matter of proving that China can survive without equipment and chips from the west.

Looking at the limitations or the problems that the Chinese companies would face is the same lithography tool.

Bulk production of these advanced nodes will become difficult with DuV technology as it requires multi patterning on the same wafer which results in lesser yield which reduces the performance and power of the processing node. Relying on DUV and multiple exposure processes to make 7nm chips for Huawei would generate high costs and poor yield rates for the manufacturer. Even though it is important to keep in mind that TSMC which is the leading manufacturer of advanced processing nodes used DUV technology to manufacture the 7nm chip in the beginning, the limitations of DUV technology will be the major area of concern for China.

The continuing export restrictions on China the US is aiming at pushing China generations behind the rest of global players. With this aim, news has shed light at the feasibility of these restrictions in stopping China from moving forward even with the most critical technologies.

Heavy restrictions placed by the US to restrict China from using the advanced processing nodes manufactured by US and its allies and manufacturing components required for the production with the commercialisation of SMIC 7nm nodes, the effectiveness of these restrictions comes under stricter review. This feat achieved by Huawei and SMIC has triggered caution in the US. Which can result in more restrictions being placed on China. Ten Republican lawmakers are calling on the Commerce Department for heavier sanctions against China’s Huawei Technologies and Semiconductor Manufacturing International Corp.

Another interesting point that was brought out by Tech Insights is the Memory Chip used in the handset. The South Korean company S K Hynix DRAM has been used in the new phone even though the company had come out with a statement that "SK Hynix no longer does business with Huawei since the introduction of the US restrictions against the company and with regard to the issue we started an investigation to find out more details,". This becomes significant as the US - South Korea and Japan alliance where the US pushes the countries in placing sanctions and restrictions over the China sector to counter China and advancing their self-sufficiency. Major chunk of the memory chip is manufactured by South Korean companies Samsung and SK Hynix. With China restricting Micron, a US company manufacturing DRAM memory chips, the best alternative for China will be SK Hynix. This might result in the USA pressuring South Korea to restrict the use of memory chips to China.

According to reports by Bloomberg, US has started its probe into the latest advanced chip produced by SMIC and the rest of the critical components that are part of the handset.

Analysing the future plan of the US over the increased sanctions on China will be based on the objective that they want to achieve through the same. According to Mr. Arun Mamphazhy the main focus of the US will be to ensure China is a few generations lower in the semiconductor industry. Even though China was able to produce advanced chips with the existing lithography machines, they cannot stand competing with other global players like TSMC or Intel.

The option of getting EUV technology is grim, and China will have to come up with alternate sources for the ASML led EUV technology. The world will have to wait and watch in the coming years how China will try to overcome the restrictions and realising the goal of self-sufficiency.


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(Ms. Sapna Elsa Abraham is a research officer at C3S. The views expressed in this article are those of the author and does not reflect the views of C3S.)

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