SMIC set to start producing 5nm chips for Huawei this year

Last year’s Huawei Mate 60 smartphone announcement underscored China’s semiconductor industry ability to produce 7-nm chips, despite technological and trade sanctions from the US and its allies. There are rumors now suggesting that Chinese company SMIC could supply Huawei with 5-nm chips this year.

According to the Financial Times, citing its own informed sources, SMIC plans to consolidate its advanced chip-making equipment at its Shanghai facility to initiate the production of 5-nm components for Huawei smartphones and its computing accelerators. The latter are likely the Ascend 920 accelerators intended to advance AI systems’ development by Chinese developers. SMIC also plans to produce these series chips using cutting-edge 5-nm technology.

Sources explain that for SMIC’s customers, the latest 7-nm and 5-nm chips cost 40-50% more than comparable products from Taiwan’s TSMC. However, considering sanctions against China, dreaming of better purchase conditions seems rather difficult. It’s worth noting that SMIC produces the HiSilicon Kirin 9000S mobile processors and the Ascend 910B computing accelerators for Huawei using 7-nm technology. Unofficially, SMIC’s production yield of suitable products under 7-nm and 5-nm technology trails TSMC’s by more than three times. This considerable gap largely determines the high cost and limited volumes of such products.

Nevertheless, the confident adoption of advanced lithographic technologies by Chinese manufacturers has strategic importance for China, rendering economic feasibility a secondary concern.

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