It has been reported that Huawei is providing full support for China’s largest foundry corporation, Semiconductor Manufacturing International Corporation (SMIC), as it prepares for the successful mass production of its 5 NANO (nanometer, one billionth of a meter) process next year. Unable to utilize the advanced processes of Taiwan Semiconductor Manufacturing Company (TSMC) and Samsung Electronics due to U.S. regulations, it seems that the domestic corporation, SMIC, is tightening cooperation on equipment development to stabilize the 5 NANO process.
According to industry sources on the 1st, SMIC plans to operate the 5 NANO foundry process next year. SMIC intends to complete the establishment of its mass production line by introducing the necessary equipment for mass production of the 5 NANO process as early as this year. SMIC has faced difficulties in developing advanced processes due to U.S. regulations, which have restricted the import of ASML's extreme ultraviolet (EUV) lithography equipment, crucial for processes below 7 NANO.
◇ Huawei's latest AI accelerator manufactured by SMIC at 7 NANO
Huawei recently unveiled the Ascend 910C AI accelerator. The Ascend 910C has been evaluated as surpassing NVIDIA's advanced AI accelerator, the H100, in inference performance. The Ascend 910C is expected to be utilized by Chinese IT corporations, including DeepSeek, in developing AI models. It is known that the Ascend 910C was mass-produced using SMIC's 7 NANO process.
There are prevalent forecasts that Huawei's next-generation AI chip mass production will face setbacks as SMIC's advanced process remains at the 7 NANO level. Currently, NVIDIA, AMD, and Intel are manufacturing AI chips using TSMC's advanced processes below 3 NANO, and in order to compete with these companies, it is essential to apply finer processes that can enhance chip performance.
To this end, it is understood that Huawei is highly committed to ensuring the smooth mass production of SMIC's 5 NANO process, a domestic foundry corporation. Chinese semiconductor equipment corporation 'SaiCarrier,' which is known to be developing equipment in cooperation with Huawei, unveiled a number of equipment solutions applicable to finer processes at SEMICON China 2025 last week. It has been reported that this corporation has registered a patent for DUV equipment processes that can replace EUV lithography equipment in the 5 NANO process.. Additionally, Huawei is reportedly enhancing cooperation with SMIC for process optimization to maximize its chip performance.
The Hong Kong South China Morning Post (SCMP) reported, "SaiCarrier registered a patent two years ago for producing 5 NANO semiconductors using DUV equipment. This is also related to SMIC manufacturing Huawei's application processors (AP) using DUV in the 7 NANO process."
◇ SMIC's 5 NANO yield around 30%... “Process costs are expected to be 50% higher than TSMC's”
The issue is that using DUV equipment results in lower precision compared to EUV equipment, leading to low yields. Utilizing DUV instead of EUV means multiple light projections need to be conducted while adjusting the position of the semiconductor photoresist. Typically, when using EUV in the 5 NANO manufacturing process, exposure work is repeated once, or at most twice; however, if replaced by DUV, it must be repeated at least four times. As the procedure becomes more complicated, yields tend to be unstable, and the performance of semiconductors is likely to decline.
Park Yoo-ak, a researcher at Kiwoom Securities, stated, "The yield of SMIC's 5 NANO process is expected to fall short of one-third," adding that "due to low yields, the price of the 5 NANO process is expected to be 50% higher than TSMC's." Currently, the yield of TSMC's 5 NANO process is exceeding 90%, while SMIC's 5 NANO process yield is expected to be around 30%.
An industry insider noted, "The analysis is dominant that SMIC's 5 NANO process yield and performance will significantly lag behind those of TSMC and Samsung Electronics," while also mentioning, "With domestic semiconductor manufacturing demand supporting stabilization of the process, and as the level of Chinese semiconductor equipment corporations rises, there is a threat to competing corporations in terms of rapidly increasing market share."