Due to the number of restrictions on Huawei, such as the inability to manage Google services on any of its phones and tablets, the Chinese company has limited itself to selling its devices in China. However, according to the latest news, the company is planning to go back to selling 5G phones, as these phones appear to be sporting chips made in-house. Huawei will use its own semiconductor manufacturing equipment, with the help of SMIC, to offer 5G phones in various markets. With a plethora of restrictions placed on Huawei, it cannot sell 5G phones using chips from Qualcomm or MediaTek. Instead, Reuters reports that the company will be able to produce 5G chips from its advanced equipment, in addition to seeking help from Semiconductor Manufacturing International Co, or SMIC. Meanwhile, the Chinese company is sticking to selling new smartphones with 4G modems, which has a negative impact on its operations because, at one point, it challenges the top of Samsung and Apple.
A research firm said that Huawei should use the SMIC N+1 manufacturing process. However, things are not as good as they may seem behind the curtain, because the expected rate of return for these pages is less than 50%, which means that the shipment of 5G chips will be limited. According to the report, only 2 to 4 million units can be shipped in a calendar year, although a second research company estimates that shipments can reach 10 million. For those wondering, SMIC's N+SMIC manufacturing process is compatible with chip manufacturing in 7nm technology, which is the beginning of TSMC's 3nm process, but that is still in progress, especially than many who said that Huawei is in "survival mode". SMIC was restricted because it could not buy the high-quality chips from Dutch manufacturer ASML to mass-produce 7nm chips.
Thankfully, the company has overcome this huge hurdle by making the DUV machine much simpler. Chip researcher Doug Fuller believes that due to the 50% rate of return, the 5G chips Huawei plans to buy will be expensive and the company will eat away at its margins as it tries to regain its position. . lost in the smartphone market. When SMIC starts producing 5G chips at scale, Huawei will be able to improve those limits in the future, but for now, there are limits to what it can achieve. Either way, there's a silver lining to all of this, and with the competition looking for something a bit more, Huawei's move is just what the company needs right now.
