- Huawei has developed an advanced new chip for its latest smartphones.
- Chinese companies are subject to U.S. sanctions that restrict their access to cutting-edge semiconductor technology.
- Competition from Chinese chips could lower prices.
China is accelerating its chip-making capabilities, allowing U.S. users to benefit from lower prices despite experts raising national security concerns.
Huawei Technologies Co. has partnered with China's leading chipmaker SMIC to develop a cutting-edge 7nm processor for its latest smartphones. The newly released Huawei Mate 60 Pro is equipped with the newly developed Kirin 9000s processor.
Yogesh Choudhary, CEO of software development company FieldCircle, said: "The United States relies heavily on foreign suppliers such as Taiwan for chips. In this case, if China can provide these suppliers, then the supply chain will be It will be stable and minimally disruptive," he told Lifewire in an email interview. "As a result, prices will not fluctuate and U.S. users will have continued access to new technology products at prices they can afford."
Both Huawei and SMIC are subject to U.S. sanctions that restrict their access to the most advanced chip manufacturing technology and equipment due to concerns about possible aid to the Chinese military. Dan Hutcheson, vice chairman of TechInsights, said in a press release that the launch of the Mate 60 Pro, equipped with a 7-nanometer Kirin 9000s chip, shows that China has made progress in reducing its reliance on U.S. technology innovation.
"The difficulty of this achievement also reflects the resilience of the country's chip technology capabilities." He added. "At the same time, it's a huge geopolitical challenge for countries trying to limit their access to critical manufacturing technologies. The result could be even more severe restrictions than we have now."
Currently, the most advanced chips on the market use the 3nm process and are manufactured by Taiwan Semiconductor Manufacturing Company (TSMC). In chip manufacturing, fewer nanometers is better. However, TSMC's production capacity is limited, and Apple has currently booked all of the company's manufacturing capacity.
Despite the U.S. ban, it took SMIC about two years to reach 7nm production capacity. By comparison, it took TSMC three years and Samsung five to reach similar levels, Long Le, an international business expert and lecturer at Santa Clara University's Levy School of Business, told Lifewire via email.
He added: "I think it will help the U.S. advanced semiconductor industry when Core International decides to sell its 7-nanometer technology to U.S. technology companies that need such chips."
Although the United States passed a law to develop the development capabilities of such chips with the help of TSMC, the United States is still unable to compete with China's technological manufacturing prowess.
Le said he wouldn't be surprised if SMIC is also building capabilities to develop 7nm in its current form and better versions of it for domestic and Western technology companies.
“Although the U.S. passed a law to develop development capabilities for such chips with the help of TSMC, the U.S. cannot compete with China’s technological manufacturing prowess, especially now that China has incentives to become the leading developer and supplier of such advanced chip," he added.
Chinese chips may lower prices, but may come with hidden costs. Captjur CEO and technology analyst Bob Bilbruck said in an email to Lifewire that if Chinese chips enter the United States, it could lead to more espionage activities by the Chinese government.
"Even though they're issuing a lot of licenses, I think that trend is changing as the political landscape and threats from China become more real every day," he added. "These technologies and sectors need to be protected."
The new chips that power Huawei phones may be just the beginning for China. According to Reuters, the country is setting up a massive government-backed fund to bolster its semiconductor manufacturing capabilities after the United States restricted chip exports to China.
Le pointed out that while experts predict that China will dominate the traditional chip field, which remains indispensable, SMIC has shown that it can copy and imitate advanced chips. He said China's success has been driven in part by hiring former executives from companies in the United States, the Netherlands, Japan and Taiwan.
"It may not be a surprise that SMIC will be able to supply high-quality advanced chips that U.S. technology companies need and want in large quantities at lower margins," he added. "For example, SMIC may set up a foundry , providing competitively priced design technology and high-volume manufacturing solutions to U.S. companies that need a stable supply of advanced chips.”
