Huawei is reportedly planning to build a a dedicated chip fabrication plant in Shanghai to secure its semiconductor supplies in the face of backbreaking US sanctions. According to FT, the new plant will start off with 45nm chips before progressing to a 28nm process node by the end of next year. Looking further into the future, the company is reportedly planning to produce 20nm chips by late 2022 to power its 5G telecom equipment to continue that business even with the US sanctions.

“The planned new production line will not help with the smartphone business since chipsets needed for smartphones need to be produced at more advanced technology nodes,” said an anonymous industry source quoted by the publication. “But if it succeeds, it can become a bridge to a sustainable future for their infrastructure business, in combination with the inventory they have built and which should last for two years or so,” he said.

As mentioned by the industry insider, the older technology would be largely irrelevant for Huawei’s smartphone business, given that its current flagship mobile processor, the Kirin 9000 is built on the 5nm process node. What’s more, with Qualcomm, Samsung, and other chip designers moving on to 5nm technology, smartphones powered by 28nm chips will just not be competitive on most parameters, including performance and power efficiency.

Even for 5G equipment, chipsets powering mobile network base stations should ideally be made on 14nm or more advanced process technology, although, using 28nm would still be possible, according to Mark Li, a semiconductor analyst at Bernstein in Hong Kong. 28nm chips would also help the company make smart TVs and other IoT devices, according to the report.

Huawei had to cease production of its HiSilicon Kirin chipsets earlier this year after the US pressured the Taiwanese fabless semiconductor firm, TSMC, to stop manufacturing all chips for the Chinese telecom giant. The development hit the company hard, with the CEO of its consumer business unit, Richard Yu, lamenting that it would be a ‘huge loss’ for Huawei and undo years of painstaking R&D in chip development.

SOURCEFinancial Times

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