CHINA WATCHTech War: Is Huawei's New Chip a Threat?

By Yuchen Li

Published 26 September 2023

The US-China chip war is heating up after Huawei launched a new phone featuring technology that Washington was hoping to keep out of China’s reach: China’s largest chipmaker SMIC has surprised the West by creating a homegrown 7nm chip. Will the United States respond with more sanctions?

The US-China chip war is heating up after Huawei launched a new phone featuring technology that Washington was hoping to keep out of China’s reach.

Last month, Huawei released the Mate 60 Pro phone without providing much detail on the chips used for the device. But Ottawa-based TechInsights, a research organization specializing in semiconductors, made a surprising discovery after taking the phone apart for analysis — the device was run on a Chinese-made Kirin 9000s 7-nanometer processor. The scale of the chip is essential, as smaller-scale chips can be packed with more elements, thus making them faster and more powerful. The chip also appears to be 5G capable.

The manufacturer, Semiconductor Manufacturing International Corp (SMIC), was previously known for making chips limited to the 14 nanometer level.

In their analysis of Huawei’s smartphone, TechInsights said that the processor indicates the Chinese government is “opening the door” to a fully domestic chip ecosystem.

Washington Gets a ‘Little Bit of a Shock’
Both Huawei and SMIC are under US sanctions for alleged security risks. SMIC, which is China’s largest chipmaker, is restricted from buying Extreme Ultraviolet (EUV) machines used for making the world’s most advanced microchips. The EUVs are exclusively supplied by the Dutch company ASML.

Some were hoping that these restrictions would preserve the US technological edge as the two countries vie for dominance on the global semiconductor market.

There’s a little bit of shock in Washington… They thought they banned everything. How come the Chinese are still making progress?” Lu Xiaomeng from the consulting company Eurasia Group told DW, specifically referring to the 5G capabilities of the Huawei phone.

Message to the U.S.
The launch of the Huawei phone was seen as somewhat of a national triumph in China. Many have noted that it was released during the visit of US Commerce Secretary Gina Raimondo, possibly as a signal of Beijing’s self-reliance to Washington.

And Washington took note — the Biden administration has already launched a probe into possible violations of the sanctions, and some Republican lawmakers are calling for tighter restrictions.

The explanation, however, might not include Chinese companies bypassing the sanctions to obtain cutting-edge technology. Last year, TechInsights already reported that SMIC might have managed to create 7 nm chips by using modified, less advanced Deep Ultraviolet (DUV) machines that are still available for purchase.

For Lu, the head of Eurasia Group’s geo-technology practice, Huawei’s latest advance should not have come as a surprise.