According to Nikkei Asia, Huawei will start mass-producing 5G smartphone chips through a collaboration with SMIC in the near future. Their goal is to resume high-end smartphone manufacturing as early as 2023.
Since 2020, Huawei has been subjected to various sanctions by the United States, preventing them from accessing crucial technologies and hindering collaborations with international manufacturers. Consequently, Huawei's smartphone business suffered a significant decline.
The report states that Huawei's independently designed 5G chips will use SMIC's 7 nm process. While current Apple iPhones have progressed to 4 nm and 3 nm processes, 7 nm is currently the most advanced process available in mainland China.
SMIC already possesses the capability to produce 7 nm chips using DUV (Deep Ultraviolet) machines. However, some analysts believe that SMIC's yield rate is currently only around 50%, and increasing production will be challenging due to the sanctions.
Furthermore, the availability of chips for Huawei is one matter, but whether these chips will meet commercial standards is another concern.
Despite facing adversity, Huawei's rotating chairman, Xu Zhijun, previously stated that the company will continue its efforts for the independent development of Chinese chips. Earlier reports from Nikkei Asia also mentioned Huawei's collaboration with local Chinese companies to build wafer fabs and assembly plants.
In July, Reuters also cited three research institutions suggesting that Huawei may start producing the 5G version of their P60 flagship smartphone before the end of 2023, with a potential market release in early 2024. However, Nikkei's report suggests that while Huawei's chip production may start in 2023, it doesn't necessarily guarantee that the smartphones will be launched in 2024.
Once the world's second-largest smartphone manufacturer, Huawei's market share dwindled to around 2% in 2022, according to Canalys data, mostly coming from the Chinese market.
IDC data for the second quarter of 2023 shows that Huawei holds a 13% market share in China, ranking sixth. Apart from competition with Apple's iPhone, there is also competition from local Chinese brands. However, Huawei's main products, the P60 series, and the foldable Mate X3 series, have performed well in the Chinese market, making Huawei the second-largest player in the high-end smartphone market segment priced above $600.
