Report: Huawei readying Chinese-based chipset plant to skirt US sanctions

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Huawei Mate 40 Pro held in the hand on the snapchat app gallery page

  • Huawei is apparently planning a chipset fabrication plant in Shanghai that would skirt US sanctions.
  • The plant would reportedly not employ any US technology, but may only build 45nm chipsets initially.
  • Huawei’s reportedly planning 20nm chips by 2022, which would be used for its 5G infrastructure.

Huawei is readying plans for a dedicated chipset fabrication plant for its telecoms business in Shanghai that would bypass US sanctions, according to a report by the Financial Times (FT).

Per the FT, the plant would be run on Huawei’s behalf by a Shanghai-based R&D business backed by the local government. It would also not employ any technology of US origin. Although this is key to Huawei’s future, the lack of any US involvement means it would start years behind established chip builders like TSMC and Samsung.

The plant will apparently begin crafting chips based on the 13-year-old 45nm process, with 28nm chipsets following by the end of 2021. At this node size, Huawei plans to build IoT hardware. By 2022, it’s targeting the 20nm process, which would allow it to build 5G base station chipsets for its telecoms division.

It’s far from ideal, but the plan is largely based on necessity. The company’s chipset stockpile garnered since 2019 has run dry, the FT reports.

Read more: Huawei Mate 40 series announced: The last Kirin-powered flagship

The plant would not build competitive chipsets for the company’s smartphones, at least not any time soon. The Kirin 9000 uses a 5nm node — a distant pipe dream for the Shanghai plant. Most of Huawei’s mid-range chips are built on the 14nm process. Judging by the plant’s rumored roadmap, Huawei may only have competitive self-produced chipsets for its smartphones at the back-end of this decade.

So the plant is by no means an instant fix for Huawei. It is, however, a long-term investment. Should the plant’s development progress as planned, the company would eventually have an alternative chipset provider that skirts US sanctions. This is at least true for its telecoms division. If not, it’s back at square one. There’s really nothing to lose at this point.

There is some hope for Huawei though. Suppliers have gradually acquired licenses from the US to supply the company’s smartphone division with components, including displays, camera sensors, and some chipsets for its mobile devices. But its 5G business remains trapped by the ongoing trade dispute. The plant, albeit a slow burner, could be key to its long-term survival.

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