Chinese corporation Huawei is reportedly preparing to launch an application processor (AP) based on 3-nanometer (nm) process technology next year. The production is being prepared in cooperation with Semiconductor Manufacturing International Corporation (SMIC), China's largest foundry corporation, based on Huawei's design. However, it remains uncertain whether SMIC, whose yield for the already mature 7-nm and 5-nm processes is known to be below 50%, can secure a yield for mass production at the 3-nm level.
On the 2nd, local media in China quoted sources within Huawei, stating that Samsung Electronics and Taiwan Semiconductor Manufacturing Company (TSMC) have begun research and development (R&D) on 3-nm chips based on gate-all-around (GAA) technology, with the aim of jointly accelerating technology development with their foundry partner SMIC for a launch next year. GAA transistors effectively minimize current leakage by wrapping the channel on all sides, enhancing performance.
Industry sources estimate that Huawei has received evaluations exceeding expectations for the performance of the 5-nm semiconductors developed in collaboration with SMIC. Despite U.S. sanctions on semiconductor equipment and software (SW), Huawei has released PCs equipped with its self-developed 5-nm chips. While it has been reported that existing equipment and technology are limited to 7-nm, there is analysis that Huawei is breaking through these limitations with its own technology.
Earlier, the U.S. government placed semiconductor export controls on Huawei for national security reasons. Consequently, Huawei is unable to procure advanced chips such as 5-nm and 3-nm from companies like TSMC in Taiwan. Therefore, Huawei is using semiconductors designed by its subsidiary HiSilicon and produced by SMIC. Huawei's main smartphones are equipped with domestically produced 7-nm semiconductors.
This also indicates that the level of chips installed in the latest smartphones and laptops in Korea and the U.S. has narrowed from a previous gap of around three years to 1-2 years. Particularly, the production of chips below 5-nm requires the use of extreme ultraviolet (EUV) lithography equipment supplied by Dutch semiconductor equipment company ASML, but currently, China is unable to secure this equipment.
SMIC has developed 5-nm chips by using an old deep ultraviolet (DUV) lithography method with multiple patterning and is expected to adopt a similar approach for 3-nm processes. A semiconductor industry official explained, "The multi-patterning method based on DUV has a significantly higher number of process steps compared to EUV, so it inevitably has lower yield and productivity."
However, Huawei and SMIC's main markets are mostly domestic, significantly contributing to the increase of the country's semiconductor self-sufficiency. Additionally, the Chinese government is providing subsidies to corporations that use domestically produced semiconductors, reportedly compensating for SMIC's poor yield and productivity with government assistance. Essentially, the government's funding has been bolstering the competitiveness of Huawei and SMIC, and it is expected that this approach will maintain semiconductor self-sufficiency for the coming years.
The key question is whether Chinese semiconductor corporations can resolve the absence of EUV equipment independently. Currently, ASML is the sole producer of EUV equipment, and Chinese semiconductor equipment companies are dedicated to developing EUV equipment with their own technology. According to prior reports by technical media such as TechPowerUp, Huawei is said to be internally conducting research and development on EUV equipment it has developed.
A domestic semiconductor industry official familiar with the situation in China noted, "Huawei is receiving investments not only from the central government but also from various local governments and is collaborating with numerous equipment companies that are virtually subsidiaries. At the Semicon China event earlier this year, an equipment company called CyCarrier revealed EUV lithography equipment, indicating that the pace of technological development is rapidly increasing."