The chip production plans of Huawei Technologies Co have become the subject of fresh speculation within the semiconductor industry after the tech giant filed a patent application for advanced lithography late last year, a key technology used to produce cutting-edge chips. Many analysts say the odds that Huawei, whose once-lucrative smartphone business has been hobbled by US trade sanctions that have cut off its access to advanced chips, can build a US-free chip production line are small. While Huawei’s in-house chip design unit HiSilicon has the ability to design advanced chips, it is a completely different undertaking to fabricate chips at high scale. For example, China’s top chip maker Semiconductor Manufacturing International Corp is only able to produce 14-nanometre node chips at scale – well behind the cutting edge of industry leader Taiwan Semiconductor Manufacturing Company. Nevertheless, speculation about Huawei’s chipmaking efforts has continued to flow ever since the firm was barred by US sanctions from procuring the services of foundries that use US-origin technologies to fabricate its chip designs. Discussion flared this week after a tech influencer implied in a post on Chinese social media that Huawei was close to achieving mass production of 12-nm and 14-nm chips while a breakthrough in advanced nodes was still some distance away. One former senior technician at Huawei, who asked not to be identified due to the sensitivity of the matter, told the Post that rumours about Huawei fabricating 14-nm chips were credible given “three years of continuous effort”. He said that Huawei has been investing in more advanced chipmaking technology but did not provide any details regarding the location and capacity of said production and what types of semiconductors it might be going to produce for Huawei. Huawei sees lacklustre sales for Aito in 2022 after high-profile foray into EVs Huawei declined to comment on its chip supply progress. However, another Huawei engineer who also declined to be identified due to the sensitivity of the matter, told the Post that he was doubtful Huawei could manage a local chip-making supply chain given that a single chip production line typically involves over 300 individual suppliers. There have been several media reports that Huawei has teamed up with other parties to produce chips. Huawei has joined with Fujian Jinhua Integrated Circuit Co. (JHICC), a DRAM memory chip maker, to refit its production facilities to make processors and other logic chips, according to a September Nikkei report, which cited anonymous sources. According to an April Financial Times report, Washington launched an investigation into memory chip maker Yangtze Memory Technologies Corp (YMTC), China’s top memory chip maker, over suspicions that it was supplying components to Huawei in contravention of sanctions. There was no public information about the probe but YMTC was later added to a US trade blacklist. Pengxinwei IC Manufacturing Co, a Shenzhen-based fab with new facilities near Huawei’s campus, could help Huawei bypass US restrictions, according to a September Bloomberg report. Pengxinwei was added to the US trade blacklist along with YMTC in December. “Huawei is definitely progressing with its chip-making efforts, but questions over whether said production can reach 14-nm is anyone’s guess”, said Yang Guang, a senior principal analyst covering the telecoms sector at research firm Omdia. Yang added that a breakthrough in 28-nm legacy node technology seems more plausible for Huawei. This would help Huawei safeguard revenue from its bread-and-butter telecoms equipment business and its nascent electric vehicle (EV) businesses, which rely on more legacy semiconductor technologies. Speculation about Huawei’s plans has increased since the China National Intellectual Property Administration (CNIPA) on November 15 revealed an application for a patent on extreme ultraviolet (EUV) lithography by Huawei, which was filed in May 2021. This could, theoretically, be applied to produce 7-nm chips. Huawei posts flat 2022 revenue, aims for ‘quality’ survival in coming year Huawei also filed a patent application last April for chip packaging technology, according to CNIPA, which can improve chip performance. Dutch firm ASML Holdings currently has a near monopoly position in the production of advanced EUV lithography machines. China’s Shanghai Micro, China’s leading lithography equipment maker which is well behind ASML technically, was also added to the US trade blacklist in December, further clouding China’s hopes for a breakthrough in lithography systems. Wang Tao, head of Huawei’s ICT infrastructure, said at a conference last April that Huawei was trying to address its chip problems by looking at basic theories, software and code in chip packaging, namely using existing technologies to improve performance. Ken Hu Houkun said at the same event that Huawei had no plan to build its own foundries.