SHENZHEN, China, July 4, 2010 (FBC) – China’s Huawei Technologies is planning a return to the 5G smartphone industry later this year after a US ban on sales of the device crippled its consumer electronics business, according to research firms.
Third-party technology research firms covering China’s smartphone sector said Huawei should be able to buy 5G chips domestically using its own advances in semiconductor design tools, according to Semiconductor Manufacturing International Com (SMIC).
The companies, citing industry sources including Huawei suppliers, spoke on condition of anonymity because of confidentiality agreements with customers.
Huawei declined to comment. SMIC did not respond to a request for comment.
A return to the 5G phone market marks a victory for the company, which has been in “survival” mode for nearly three years. Huawei’s consumer business revenue reached 483 billion yuan ($67 billion) in 2020, before falling nearly 50% a year later.
The Shenzhen-based tech giant competed with Apple ( AAPL.O ) and Samsung ( 005930.KS ) to make the world’s biggest handsets until rounds of U.S. sanctions from 2019 cut access to chip-making equipment needed to make its most advanced models. .
The US and European governments have labeled Huawei a security threat, which the company denies. Since then, Huawei has only sold a limited number of 5G models using stock chips.
Huawei, which sells its latest generation 4G phones, fell from most global rankings last year, with sales hitting record lows, despite a 10% market share in China in the first quarter, according to consultancy Canalys.
5G predictions
One of the research firms said they expect Huawei to use SMIC’s N+1 manufacturing process, but with used chips at less than 50 percent of forecast volume, 5G shipments will be limited to around 2 million to 4 million units. A second company estimated it could reach 10 million units, without providing further details.
Huawei shipped 240.6 million smartphones worldwide in 2019, its peak year, Canalys reported, before selling its flagship unit, which accounted for nearly a fifth of shipments that year.
The state-backed China Securities Journal reported this month that Huawei raised its 2023 mobile shipment target from 30 million to 40 million units earlier in the year, not to mention a return to 5G phones.
[1/2]The Huawei logo and 5G symbol are seen at the Mobile World Congress (MWC) in Shanghai, China on June 28, 2019. REUTERS/Aly Song
Huawei could produce 5G models this year, such as the iPhone rival P60, with new research in early 2024, the three research firms said, basing such predictions on information received from contacts in Huawei’s supply chain. Latest company announcements.
However, the US ban has cut Huawei off from Google’s Android operating system and the suite of developer services on which most Android apps are based, limiting the appeal of Huawei handsets outside of China.
Chip design tools
Research firm Huawei announced in March that it had made breakthroughs in electronic design automation (EDA) tools for chips manufactured with more than 14 nanometer (nm) technology.
Chip design companies use EDA software to produce chip designs before they are mass produced in factories.
Citing their own industry sources, the research firms believe that Huawei’s EDA software will enable them to make chips with the SMIC N+1 manufacturing process at 7 nm, the powerful semiconductors typically used in 5G phones.
Washington blocked SMIC from acquiring advanced chip manufacturing equipment from Dutch company ASML ( ASML.AS ), an AUV machine critical to the process of making 7 nm chips.
But some analysts have found indications that SMIC is still able to manufacture 7 nm chips by modifying simple DUV machines that it can buy freely from ASML.
A second research firm said it noted that Huawei has asked SMIC to produce chip parts for 5G products below 14nm this year.
Doug Fuller, who researches chips at the Copenhagen Business School, said that 5G chips “will be expensive” with less than 50 percent of predicted production rates.
“If Huawei wanted to eat the cost, I guess they could do that, but I don’t see chips like this as price competition,” Fuller said.
($1 = 7.2023 Chinese Yuan Renminbi)
Reporting by David Kirton; Editing by Jamie Fried
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