The Chip Insider®– Huawei announces 5nm

Xiaomi has 3nm mobile APU: Sources indicate these chips were made on...process...

Huawei announces 5nm: Where do they go from here? Huawei reaching 5nm capability looks to be a quarter ahead of predictions I made back in 2023, after TechInsights’ reverse engineering found the 7nm SMIC APU in the Huawei Mate 60 Pro...To put this in perspective, hitting 5nm now still puts China...Of course, the real question is how equivalent Huawei’s 5nm is to Western 5nm...Without EUV, it...The Longer-Term Game: Assuming Huawei continues gaining at a rate of 1 quarter per node, or a 7-quarter cadence, Huawei will catch up to the West by 2031...One way will be for China to play off the current trade tensions between the EU and the US. They would have to split the two, which would mean the EU needs to depend on China providing security guarantees...The bottom line is that China must develop its own indigenous semiconductor supply chain.

Last year Huawei reported spending of 179.7B CNY on R&D...half of which is equivalent to the combined 2024 R&D spending of ASML, Applied Materials, KLA, Lam Research, and Tokyo Electron. Huawei’s total is a couple billion dollars short of adding in TSMC’s and Nvidia’s R&D spending. Using more detailed modeling of Huawei’s areas of spending, I come up with the following...So, Huawei is playing catch-up by matching Western leadership's R&D spending levels. One might think it will be easy for the West to stay ahead. But there are two important tailwinds for pushing Huawei ahead faster...imitate-versus-innovate (ivi) and PPP differences. As for ivi, copying known solutions costs far less and is much faster than innovating them into existence...

As for PPP, or Purchasing Power Parity exchange rates...So the $25B in currency exchange rated R&D spending by Huawei is actually worth $93B in China in US equivalency or...Hence, Huawei’s spend levels will not be a barrier to its developing an EUV technology of its own. It’s just a matter of time. This paradigm is not new. The PPP threat China poses was a part of a 2005 presentation I gave at SEMI ISS. But as Ken Levy once told me, “Nobody listens to you, Dan.” Yet, herein lies the problem President Trump is trying to solve 20 years later with tariffs: long-term trade imbalances create PPP differences that result in loss of long-term competitiveness and national security.

“If you chase the market...You’ll always see its backside.” – David Morrell