Huawei’s new smartphone, the Mate 60 Pro, marks a new high-water mark in China’s technological prowess. It contains sophisticated chips designed and manufactured in China, despite onerous U.S. export controls aimed at blocking production. This technical jump. These sanctions were first imposed by the Trump administration and continued under President Biden.
The timing of Raimondo’s announcement by phone on Monday while in Beijing appeared to be a show of defiance.Chinese state media declared It showed the US that the trade war was a “failure”.
Paul Triolo, director of technology policy at Albright Stonebridge Group, a Washington-based business consulting firm, said the new phone is “a huge blow to all of Huawei’s former technology suppliers, primarily U.S. companies. ” he said.
“The main geopolitical significance is that we have shown that it is possible to completely engineer it,” he said. [without] Although it may not be as good as the cutting-edge Western European models, it still produces products with sufficient performance. ”
Biden administration officials declined to comment.
How powerful the new chip design will be remains an open question. Unusually, Huawei revealed little in its announcement about key aspects of the phone, including whether it is 5G-enabled and what process was used to manufacture it. In a statement, Huawei simply touted the phone as a breakthrough in “satellite communications.”
China’s national broadcaster CGTN Post to XThe company, formerly known as Twitter, called the phone Huawei’s “first high-end processor” since U.S. sanctions were imposed, and said the chip inside is a company partly owned by the Chinese government. He said it was manufactured by Semiconductor Manufacturing International.
A source told the Washington Post that the Mate 60 Pro is equipped with a 5G chip. Speed tests posted online by an early purchaser of this phone suggest its performance is on par with his top-of-the-line 5G phones. July, Reuters report Three technology research firms, speaking on condition of anonymity, said Huawei’s return to the 5G mobile market is imminent.
Nikkei Asia ReportedSMIC will use the so-called 7-nanometer process to manufacture chips for Huawei, the most advanced level in China, the people said. This is comparable to the process used in the chips inside Apple’s iPhone, which was released in 2018. Apple’s latest iPhone chips were manufactured by Taiwan Semiconductor Manufacturing Company using a so-called 4-nanometer process. Nanometers are a measure of chip size, and the fewer nanometers in your process, the better. Paper is approximately 100,000 nanometers thick.
U.S. sanctions are aimed at slowing China’s progress in emerging fields such as artificial intelligence and big data, by cutting off its ability to buy or manufacture advanced semiconductors, the brains of these systems. The purpose is to delay the The announcement of a domestically produced 7-nanometer chip suggests that that did not happen.
Industry experts cautioned that it is still too early to tell how competitive China’s semiconductor manufacturing business will become. But what is clear is that China is still in the game.
“This shows that Chinese companies like Huawei still have a lot of capacity to innovate,” said Chris Miller, a professor at Tufts University and author of “The Chip Wars.” “I also think the debate in Washington about whether restrictions should be tightened will probably intensify.”
Few parties have yet spoken publicly as industry groups seek to confirm further details and assess their positions. But there’s no doubt that the new Huawei phones have sparked debate about what’s coming next. “There’s a lot of activity going on,” said Craig Allen, president of the U.S.-China Business Council, a nonprofit group that promotes U.S.-China trade.
Opinions are divided on how the U.S. government should respond.
“This development will almost certainly lead to further calls for stricter export control licenses for Huawei’s U.S. suppliers, allowing them to continue to ship commodity semiconductors not used in 5G applications,” Triolo said. .
Meanwhile, he added, “U.S. semiconductor companies hope they can continue to ship commodity semiconductors to Huawei and other Chinese end users to maintain market share and avoid design difficulties.” There will be,” he added. [without] A wider range of U.S. technology from the Chinese supply chain. ”
The U.S. government faced a similar predicament during the Cold War: how to thwart Soviet technological development. Willy Shi, an economist at Harvard Business School, said Huawei’s breakthrough is reminiscent of what happened with Global Positioning System technology, now commonly known as GPS. The U.S. Department of Defense developed the technology and restricted exports, wary of it falling into the hands of rivals. But export restrictions have prompted Moscow and other governments to develop their own versions, Shi said.
“So we’ve gone from a situation where the U.S. actually controlled the technology and everyone came to the U.S. to buy it, to now there are a variety of alternatives,” he said. “And you have to wonder if the same thing is happening with Huawei now.”
China’s competition to develop advanced domestic chips began in May 2019. Amid the Trump administration’s trade war with China, the Commerce Department placed Huawei on the Entity List, banning it from doing business with American companies. Some wondered if this was a “death penalty” for Huawei as it was prevented from obtaining key components.
Huawei has long been in Washington’s crosshairs as the sharpest tip of China’s high-tech industry. Since 2012, Huawei has been the world’s largest supplier of equipment needed to operate the global internet, a position it has maintained despite U.S. sanctions. Huawei file More patent applications Better than any other Chinese company, Chinese startups are leveraging Huawei’s AI algorithms to build their own applications for facial and voice recognition, pattern identification, and more.
Huawei’s business fields include geopolitically sensitive products such as mobile base stations that provide mobile phone coverage in countries, video surveillance equipment for police, and submarine cable systems. All require chips as their brains.
In the face of sanctions, Huawei’s charismatic founder Ren Zhengfei, who started his career in China’s Army Corps of Engineers, rallied Huawei’s staff and waged an all-out war to keep the company alive. They had been stockpiling chips from overseas suppliers in anticipation that the U.S. government might close sanctions loopholes. This actually happened. The U.S. government has sanctioned SMIC, the only factory in China that could potentially make advanced chips for Huawei, and halted sales to China more broadly for suppliers of specialized chip manufacturing equipment. They continued to close the loopholes one by one, asking for the same.
Since then, Huawei has hunkered down in survival mode, leveraging its stockpiled chips as it races to secure domestic chip manufacturing solutions.
SMIC has strived to manufacture cutting-edge chips since its founding in 2000, but that dream has long seemed like a pipe dream. Each generation of chips reflects new frontiers in how far microscopically tiny humans can draw precise designs onto sheets of silicon. By the time SMIC caught up with his generation, industry leaders were racing to go even further, building on new advances by the world’s brightest physicists and engineers.
“Chip is the most complex artifact that good humans have ever created, so it’s hard to keep up,” Miller said. “There’s nothing more complex than what humans make…This is really difficult.”
Miller said a significant gap remains between SMIC’s capabilities and that of TSMC, an industry leader in manufacturing cutting-edge chips for companies such as Apple. It is also unclear whether SMIC will be able to produce advanced chips at a scale and cost that will make its products more competitive globally.
Shih said that regardless of whether SMIC can reach the cutting edge, foundries will certainly be able to produce older generation chips at scale, potentially driving down chip prices around the world. “We’re going to see pricing pressures and commoditization pressures,” he said.
U.S. companies such as Intel and Qualcomm have already lost significant sales in China, the world’s second-largest economy, as U.S. sanctions squeeze their research and development budgets. U.S. executives worry this could weigh on their long-term strength in an industry where only a few of the strongest and fastest companies tend to survive.
“It will start a downward spiral of capability and we won’t be able to compete with the rest of the world,” said one industry executive, who asked not to be named due to the sensitivity of the topic.
Since the beginning of the US chip sanctions, the Chinese government has done everything in its power to prevent further expansion of the global chip industry from falling under Washington’s influence. For example, Intel recently announced that it would have to pay Israel’s Tower Semiconductor a $353 million termination fee after failing to obtain acquisition approval from Chinese regulators.
Ellen Nakashima contributed to this report.