Huawei: new plan to produce chips could save the company

Huawei: new plan to produce chips could save the company

The Chinese company has been struggling with US sanctions for some time. Now Huawei has allegedly found a plan to work around these limitations.

Due to US sanctions, Huawei is unable to use of many American technologies. These restrictions range from the lack of a Play Store on the company's Android smartphones to the lack of hardware, such as Qualcomm processors.

As the Financial Times writes in a new report, the Chinese company, in search of an alternative, has now decided to take chip production into their own hands. They are reportedly planning to set up their own chip factory in Shanghai to produce processors for their telecom products. According to the Financial Times sources, the factory will be operated by a Huawei partner, Shanghai IC R&D Center (ICRD).

US sanctions had caused Huawei to start stockpiling chips. These stocks could possibly be sufficient to bridge the time until the company's own production. In the long term, the chip factory could thus provide a way for the company to survive.

huawei mate 40 pro offial design back
The Mate 40 Pro is the latest addition to its smartphone offerings. / © Huawei

Huawei: Factory to start with low-end chips

The first step will be low-end chips produced in the 45 nm process. The well-known chip giants already used this technology 15 years ago. Currently, 5 nm chips are being produced by TSMC for Apple. Huawei, therefore, has an enormous need to catch up before it can compete with the current manufacturers.

By the end of next year, they want to have started the production of 28 nm chips. According to the Financial Times this is enough to produce chips for smart TVs or "Internet of Things" devices.

For the end of 2022, a production in the 20 nm process is planned. This could at least satisfy the demand for the company's mobile communications equipment. However, experts say that even this will not be enough to produce chips suitable for smartphones.

Huawei's plan, however, could boost China's ambitions to produce its own chips in the hope of reducing its dependence on the US giants and their technologies. Neither Huawei nor ICRD wanted to comment on the report to the Financial Times.

Source: Financial Times

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  • storm 3 weeks ago Link to comment

    I won't hold my breath for a company just starting on production for stuff years behind the curve. The government may prop them up, but that's not because they're actually any good. That's just a jobs program.