A Technological Milestone for China Raises Eyebrows in the U.S.

A Technological Milestone for China Raises Eyebrows in the U.S.

China has reached an important milestone in semiconductor manufacturing that highlights its rapid advancement, despite trade restrictions imposed by the United States.

Huawei’s New 5G Chip

Huawei recently unveiled its latest smartphone, the Mate 60 Pro. Analysis shows the phone contains Huawei’s own Kirin 9000s processor, which can connect to 5G networks. While not groundbreaking on its own, the chip was manufactured by China’s Semiconductor Manufacturing International Co (Smic) using a 7nm process.

This achievement didn’t come as a total surprise. Smic produced 7nm chips for cryptocurrency mining back in 2021. However, this marks the first time the technology has been used in a Chinese smartphone.

The Significance of 7nm

In electronics, the size of transistors is measured in nanometers (nm). These tiny switches are densely packed onto chips, enabling more operations. The smaller the transistors, the more that fit on a chip, increasing its processing power.

At 7nm, Smic hasn’t yet reached the cutting-edge 3nm transistors deployed by market leaders Taiwan Semiconductor Manufacturing Company (TSMC) and Samsung. But it has caught up with Intel, which has lagged behind competitors in recent years.

Overcoming Trade Restrictions

Reaching 7nm without the most advanced equipment from ASML, a Dutch lithography firm subject to U.S. export controls, was likely costly for Smic. Using older gear requires repeating steps, slowing production and increasing defects. However, with enough time and money, 7nm is attainable. TSMC took a similar route with its first 7nm chips, incrementally improving existing technology rather than investing in bleeding-edge systems.

Trade sanctions have undoubtedly impeded China’s progress. But Smic may have stockpiled critical foreign components before restrictions took effect. Ongoing access to technology is also possible through third parties. For example, the Mate 60 Pro allegedly contains memory chips from South Korea’s SK Hynix.

Cracks in the Armor

Rather than a dramatic overcoming of U.S. restrictions, China’s achievement points to cracks in the armor of trade controls. Loopholes allow continued access to American technology, according to experts. Faced with this reality, some U.S. lawmakers already push for harsher enforcement and export bans.

For Apple, the Mate 60 Pro raises the risk of losing ground in China, which generates nearly 20% of its revenue. With a comparable domestic option, China’s government could expand existing iPhone prohibitions. This underscores how semiconductors sit at the heart of the U.S.-China tech conflict.

The Bigger Picture

The Mate 60 Pro contains around 90% Chinese-made components, whereas no other country comes close to this level of self-sufficiency. While not on par with the global frontrunners yet, China’s rapid progress shows its determination to build a competitive domestic semiconductor industry, despite international barriers. With strong government backing, expect more milestones ahead.

Key Takeaways

  • Huawei’s new 5G smartphone contains a 7nm processor made entirely in China.
  • Achieving advanced 7nm production without the latest gear highlights China’s push for semiconductor self-reliance.
  • Trade restrictions have slowed but not stopped Chinese chip progress. Enforcement gaps allow access to foreign tech.
  • With a viable Chinese option, Apple faces greater risk in a vital market.
  • Semiconductors are central to the technology battle between the U.S. and China.