Huawei is stockpiling several years worth of semiconductor chips used in mobile communication base station equipment. Unlike the smartphone division, where development of the latest in-house application processor has stopped, the impact of US sanctions on the communications equipment business will likely be limited for the time being.
In May of last year, the US Department of Commerce added Huawei and 70 affiliates to the’Entity List’. It was a measure that made it impossible to buy parts of American companies without the approval of the US government. But a damage to Huawei’s product manufacturing was not significant.
An industry insider who is associated with Huawei said, “Huawei has already secured a few years’ worth of semiconductors at the end of last year.” Huawei is supplying 4G·5G wireless communication base station equipment to LG in South Korea.
The US government announced additional sanctions against Huawei in May this year. The key is to prevent TSMC, the world’s best foundry, from producing semiconductors ordered by Huawei Group’s semiconductor designer Hi-Silicon. It exhibited a visible effect that prevented the production of semiconductor chips designed by Hi Silicon.
It is certain that TSMC, the world’s largest foundry, will not produce semiconductors ordered by Hi Silicon, a semiconductor design company under the Huawei Group, starting on the 15th of next month.
According to the Chinese media Huawei’s consumer division CEO Yu Cheong-dong said at the’China Info 100′ event, “Kirin 9000 will be installed on the strategic smartphone ‘Mate 40′ in the second half of the year. 9000’ cannot be produced from the 15th of next month. It will be the last Kirin chip model. It’s very unfortunate in terms of semiconductor manufacturing.”
In January of last year, Huawei announced the world’s first core chipset for 5G base stations, Tiangang (天罡). At the time, Ding Yun, CEO of Huawei’s carrier division, said, “As a result of investing in basic science and technology for a long time, Huawei has secured the core technology necessary for mass production of large-scale 5G base stations.” Tiengang supports 3.5GHz and 2.6GHz frequencies, and is said to have 2.5 times stronger computing power than previous generation products.
Tiengang was produced by TSMC’s 7-nanometer process. TSMC began mass production of 7 nanometers in the second half of 2018, six months before Huawei announced Tiengang. The 7-nanometer process’s share of annual sales tripled from 9% in 2018 to 27% last year. It was 36% in the second quarter of this year.
For more than a year and a half, from January last year, when Huawei announced the Tiengang, to mid-September this year, when hi-silicon semiconductor production was limited by US sanctions, TSMC seems to have had time to produce Huawei’s Tiengang.
An industry insider said, “Base stations installed outdoors require more reliability and stability for external environments such as being waterproof and dustproof,” and “Huawei improves performance through software upgrades while using the same product for several years.”