Previously, the U.S. Department of Commerce revoked Intel and Qualcomm’s export licenses to Huawei, leading to speculation that they are now prohibited from collaborating with Huawei. According to a report from TechNews, Qualcomm anticipates that after 2024, it will no longer receive product revenue from Huawei but will continue to collect patent royalties.

As per a report from global media outlet tom’s Hardware, on May 7, 2024, the U.S. Department of Commerce informed Qualcomm that it was revoking the company’s license to export 4G and certain other integrated circuit products, including Wi-Fi products, to Huawei. a nd its affiliates and subsidiaries, effective immediately.Consequently, Qualcomm expects no product revenue from Huawei after this year.

According to TechNews, while Qualcomm used to provide processors to Huawei for use in its smartphones, Huawei’s HiSilicon division has developed its own chipsets, Kirin 9000 and 9010, therefore barely needing the support from Snapdragon processors.

Qualcomm reportedly noted in another statement that Huawei has recently launched new 5G-supported devices using its own IC products. Although Qualcomm can still sell IC products to Huawei under the current license, it does not expect to receive any product revenue from Huawei after this year.

Despite having its own processors, Huawei lacks the alternative for Intel’s Core or Xeon CPUs from PCs and servers, and will likely continue using them for the foreseeable future, according to tom’s Hardware. Meanwhile, Qualcomm may continue to collect patent royalties from Huawei and other Chinese smartphone manufacturers.

Qualcomm also mentioned that it has recently extended, renewed, or signed licensing agreements with several major OEMs. Negotiations are ongoing with key OEMs, including Huawei, for agreements set to expire at the beginning of fiscal year 2025.

Read more

• [News] As U.S. Export Restrictions Tighten, Qualcomm Reportedly Affirms Huawei May no Longer Need its Chips
• [News] Qualcomm Advances into AI PC Market, Reportedly Adopting 4nm Process

(Photo credit: Qualcomm)

To strengthen its semiconductor supply chain, the Chinese government is reportedly requiring domestic automakers, including BYD, to expand their procurement of locally-produced chips. The goal is to increase the proportion of domestically-sourced automotive chips to 25% by 2025.

According to a report from Nikkei on May 16th, the Chinese government has instructed major local automakers to increase the proportion of domestically-produced automotive chips they procure to 25% by 2025 from 10% currently. The Chinese authorities hope that by raising the procurement ratio of Chinese-made chips, they can accelerate the pace of independence for the country’s semiconductor supply chain.

As per the same report, the Chinese Ministry of Industry and Information Technology (MIIT), which is responsible for national automotive industry policy, has asked major Chinese automakers to increase the local procurement ratio of automotive chips to 20-25%. This request targets not only the major electric vehicle manufacturer BYD but also SAIC Motor, Dongfeng Motor, GAC Motor, and FAW Group.

However, this requirement is not mandatory; instead, it encourages automakers to expand their procurement of local chips through incentives. An industry source cited by the same report revealed that ultimately, the goal is for all automotive chips to be locally sourced.

The report further indicates that though the conflict between China and the U.S. in the semiconductor sector continues to intensify, manufacturing technologies used for automotive chips are usually not the most advanced, and therefore not subject to U.S. export controls.

This means that Chinese semiconductor manufacturers will be able to procure manufacturing equipment from overseas, bolstering their automotive chip businesses.

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• [Insights] China’s Position in EV Battery Market to be Shaken as the Mass Production Race of All-Solid-State Battery Industry Speeds up?
• [News] South Korea Reportedly Develops AI Chips for Autonomous Vehicles, Challenging NVIDIA

(Photo credit: iStock)

According to a report from global media outlet Wccftech, China’s largest foundry, SMIC, is rumored to produce 5-nanometer chips for Huawei this year, without the need for extreme ultraviolet (EUV) lithography machines manufactured by Dutch company ASML.

As per a report by Businesskorea, SMIC seems to be able to use old deep ultraviolet (DUV) lithography machines purchased before the sanctions were implemented to manufacture 5-nanometer chips. However, this would incur higher costs and could also affect yields.

Previously reported by the Financial Times, industry sources have indicated that SMIC’s prices for 5-nanometer and 7-nanometer processes are 40% to 50% higher than TSMC’s, and the yield less than one-third of TSMC’s. Later, it was estimated that SMIC’s 5nm chip prices would be up to 50 percent more expensive than TSMC’s on the same lithography, meaning that Huawei would face a tough time selling its Mate 70 series to consumers with a decent margin if it attempts to absorb a majority of those component costs.

Huawei was previously said to be working closely with its local foundry partner to introduce a new Kirin SoC that will be found in the upcoming Mate 70 series, scheduled to be released in October, with SMIC’s 5nm process has been said completed and is ready to mass produce the first batch of wafer.

This means that if Huawei attempts to absorb most of these costs, it will face the challenge of insufficient profit margins when selling the Mate 70 series to consumers. The tech giant may attract customers by promoting its in-house HarmonyOS Next, which is reportedly set to debut with the Mate 70 series. The model is said to be equipped with better efficiency in memory management compared to Google’s Android platform, according to Wccftech.

Meanwhile, Intel has recently secured its supply of the new High-NA EUV (high-numerical aperture extreme ultraviolet) lithography equipment from ASML, which the semiconductor heavyweight will allegedly use on its 18A (1.8nm) and 14A (1.4nm) nodes, according to a report from TheElec.

On the other hand, according to sources cited by a report from Economic Daily News, TSMC’s A16 advanced process node might not necessarily require ASML’s latest advanced chip manufacturing equipment, the High Numerical Aperture Extreme Ultraviolet Lithography (High-NA EUV), due to its expensive price.

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• [News] How Costly is the High-NA EUV? TSMC Reportedly Shocked, Considering Not Using the Equipment in its A16 Node
• [News] Intel Secures First Batch of High-NA EUV Equipment from ASML, Ahead of Samsung and SK Hynix

(Photo credit: SMIC)

According to sources and documents cited in a report from Reuters, two major Chinese chip manufacturers are in the early stages of producing High Bandwidth Memory (HBM) semiconductors, primarily for AI chipsets. Despite facing export restrictions from the United States, China is currently making progress mainly on older versions of HBM, gradually reducing reliance on other global suppliers.

Sources cited in the same report revealed that China’s largest DRAM chip manufacturer, ChangXin Memory Technologies (CXMT), is collaborating with chip packaging and testing company Tongfu Microelectronics to develop HBM chip samples, which are being showcased to potential customers.

On the other hand, Wuhan Xinxin Semiconductor Manufacturing Co., Ltd. (XMC) is constructing a 12-inch plant with a monthly capacity of 3,000 wafers, which is planned to  manufucture HBM chips. Per the corporate registration documents, the plant is expected to commence operations in February this year.

Sources in the report mentioned that CXMT and other Chinese chip companies regularly hold meetings with semiconductor equipment manufacturers from South Korea and Japan to purchase tools for HBM development. Currently, CXMT, Tongfu Microelectronics, and XMC have not responded to these reports.

CXMT and XMC are both private companies that have received funding from local governments in China to drive technological development amid the country’s vigorous efforts to develop its semiconductor industry.

There also are reports indicating that Huawei, the Chinese tech giant subject to US sanctions, looks to collaborate with other local companies to produce HBM2 chips by 2026. According to a report from The Information, a group led by Huawei aimed at producing HBM chips includes Fujian Jinhua Integrated Circuit.

As per market reports cited by Reuters, China’s current focus is on HBM2. While the US has not restricted the export of HBM chips, HBM3 chips are manufactured using US technology, which many Chinese companies, including Huawei, are prohibited from using.

According to the analysis by Trendforce, the research and manufacturing of HBM involve complex processes and technical challenges, including wafer-level packaging, testing technology, design compatibility, and more. CoWoS is currently the mainstream packaging solution for AI processors, and in AI chips utilizing CoWoS technology, HBM integration is also incorporated.

CoWoS and HBM involves processes such as TSV (Through-Silicon Via), bumps, microbumps, and RDL (Redistribution Layer). Among these, TSV accounts for the highest proportion of the 3D packaging cost of HBM, close to 30%.

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• [News] XMC Initiates IPO Plan, Potentially Becoming China’s First HBM Foundry
• [News] Three-way Contest for HBM Dominance, Uncertainties Surrounding China’s Supply Chain Involvement

(Photo credit: CXMT)

NOR Flash manufacturer Wuhan Xinxin Semiconductor Manufacturing Co. (XMC) recently disclosed an IPO counseling filing with the Hubei Securities Regulatory Bureau, according to the official website of the China Securities Regulatory Commission. Its recently announced bidding project may indicate its ambition to become China’s first HBM foundry, according to the report by Chinese media Semi Insights.

As per information from its website, XMC provides 12-inch foundry services for NOR Flash, CIS, and Logic applications with processes of 40 nanometers and above. Originally a wholly-owned subsidiary of Yangtze Memory Technologies (YMTC), XMC announced in March its first external financing round, increasing its registered capital from approximately CNY 5.782 billion to about CNY 8.479 billion. Its IPO counseling filing also indicates that it is still majority-owned by YMTC, with a shareholding ratio of 68.1937%.

According to market sources cited in the same report, XMC’s initiation of external financing and IPO plan is primarily aimed at supporting the significant expansion during a crucial development phase for YMTC. Given the substantial scale of YMTC, completing an IPO within three years poses challenges. Therefore, XMC was chosen as the IPO entity to enhance financing channels.

It is noteworthy that XMC also announced its latest bidding project on HBM (High Bandwidth Memory) – related advanced packaging technology R&D and production line construction, according to local media.

The project indicates the company’s capability to apply three-dimensional integrated multi-wafer stacking technology to develop domestically produced HBM products with higher capacity, greater bandwidth, lower power consumption, and higher production efficiency. With plans to add 16 sets of equipment, XMC’s latest project aims to achieve a monthly output capacity of over 3000 wafers (12 inches), showing its ambition of becoming China’s first HBM foundry.

On December 3, 2018, XMC announced the successful development of its three-dimensional wafer stacking technology based on its three-dimensional integration technology platform. This marks a significant advancement for the company in the field of three-dimensional integration technology, enabling higher density and more complex chip integration.

Currently, XMC has made much progress in the research and development of three-dimensional integrated multi-wafer stacking technology, which has been evident in the successful development of three-wafer stacking technology, the application of three-dimensional integration technology in back-illuminated image sensors, advancements in HBM technology research and industrialization efforts, as well as breakthroughs in the 3D NAND project.

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• [News] China’s Chip Production Surges by 40% in Q1
• [News] Three-way Contest for HBM Dominance, Uncertainties Surrounding China’s Supply Chain Involvement

(Photo credit: XMC)