A high-ranking Huawei executive has reportedlymade a rare admissionthat China’s ambitious semiconductor efforts may have peaked. On June 9, during the Mobile Computility Network Conference in Suzhou, China, Huawei’s Cloud Services CEO Zhang Ping’an voiced concerns about China’s inability to source 3.5nm chips because of U.S. sanctions.
Zhang pointed out thatTSMC, based in Taiwanand therefore not subject to the U.S. sanctions, continues to increase its supply of 3.5nm semiconductors. “However, under U.S. sanctions, China has no way to secure these products,” he said.
The comments were reportedly a surprise to many in the industry since China has consistently reported confidence in the strength of its semiconductor growth. In May, the Chinese government announced a 65.6 trillion won ($47.5 billion) third fund to reinforce investment in the country’s semiconductor industry.
Huawei recently succeeded in mass-producing7nm chipswithout using extreme ultraviolet (EUV) technology. This surprised the global semiconductor market and led to speculation that the chipmaker could soonmass-produce 5nm chipsas well.
The restrictions the U.S. placed on sending manufacturing equipment and technology to China have prevented Chinese semiconductor tech from further advancement, though. Zhang noted that producing 3.5nm chips would requireEUV technology, which China does not yet possess.
The nation is trying to develop the required technology on its own, but this is generally considered highly challenging because engineers need to circumvent U.S. and Dutch patents to succeed.
Given the difficulties China is facing from U.S. sanctions, Zhang believes Huawei and other manufacturers should make more effective use of the technology that is available. He said, “The reality is that we can’t introduce advanced manufacturing equipment due to U.S. sanctions, and we need to find ways to effectively utilize the 7nm semiconductors.”
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The counterpoint to this is that some manufacturers are finding clever ways to work around the restrictions. ChineseDRAM maker CXMTcircumvented U.S. sanctions on sub-18nm DRAM equipment by preparing to mass-produce 18.5nm DRAM. Mention has also been made of a “gray market” that allows Chinese firms to acquire U.S. equipment parts through unofficial procurement channels.
If China remains unable to produce more advanced semiconductors, it will likely try to continue growing its share of the legacy semiconductor market. Research firm Trend Force predicts that its share will increase from 29% in 2023 to 33% by 2027.
Jeff Butts has been covering tech news for more than a decade, and his IT experience predates the internet. Yes, he remembers when 9600 baud was “fast.” He especially enjoys covering DIY and Maker topics, along with anything on the bleeding edge of technology.
