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Huawei readying Chinese-based chipset plant to skirt US ban

Huawei Mate 40 Pro held in hand on the Snapchat app gallery page

  • Huawei is apparently planning a factory to manufacture chipsets in Shanghai to circumvent US sanctions.
  • The system allegedly would not use US technology, but may initially only build 45 nm chipsets.
  • According to reports, Huawei plans 20nm chips to be used for its 5G infrastructure by 2022.

Huawei is preparing plans for a special chipset manufacturing facility for its telecommunications business in Shanghai to circumvent US sanctions. This comes from a report from the US state Financial Times (FT).

Per the FTThe facility would be operated on behalf of Huawei by a Shanghai-based research and development company supported by the local government. Nor would it use any technology of US origin. While this is key to Huawei’s future, the lack of any US involvement means it would start years behind established chipmakers like TSMC and Samsung.

It appears that the facility will begin manufacturing chips based on the 13-year-old 45 nm process. 28 nm chipsets will follow by the end of 2021. At this node size, Huawei plans to build IoT hardware. The 20-nm process is to be aimed for by 2022, with which 5G base station chipsets can be built for the telecommunications sector.

It’s far from ideal, but the plan is largely based on necessity. The company’s chipset stock that has been collected since 2019 has run dry FT Reports.

Continue reading: Huawei Mate 40 series announced: The last Kirin-powered flagship

The facility wouldn’t build competitive chipsets for the company’s smartphones, at least not anytime soon. The Kirin 9000 uses a 5nm node – a distant pipe dream for the Shanghai facility. Most of Huawei’s mid-range chips are based on the 14 nm process. Judging by the plant’s rumored roadmap, Huawei may not have competitive self-produced chipsets for its smartphones until the end of this decade.

The system is by no means an immediate solution for Huawei. However, it is a long-term investment. Should development of the facility proceed as planned, the company may have an alternative chipset provider that circumvents US sanctions. This applies at least to the telecommunications sector. If not, it’s back to first place. At this point there is really nothing to lose.

There is some hope for Huawei, however. The suppliers have gradually acquired licenses from the USA to supply the company’s smartphone division with components such as displays, camera sensors and some chipsets for their mobile devices. However, the 5G business remains trapped in the ongoing trade dispute. The plant, albeit a slow burner, could be key to its long-term survival.

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