Huawei, China’s largest telecommunications equipment company under strong U.S. sanctions, will reportedly set up its own semiconductor plant in Shanghai, China.
According to the Financial Times, Huawei has been suffering from difficulties in supply and demand of semiconductors. It is due to U.S. export regulations. Earlier, the U.S. blocked transactions with Chinese companies due to security concerns. Therefore the Chinese company has decided to build a semiconductor plant in Shanghai, China.
According to the media, Huawei plans to produce 45-nano semiconductors. It requires low technology in the early stages of the plant’s establishment. And it also plans to make 28-nano semiconductors. They are more advanced forms, by the end of next year at the latest.
The effect of the new semiconductor plant for Huawei
Huawei is a company that has no experience in manufacturing semiconductors. And if chips are produced successfully through manufacturing plants, then the telecommunication equipment and smartphone businesses will be able to proceed without a hitch.
At the end of 2022, Huawei has set a goal of producing 20-nano process chips that will be available for 5G telecommunication equipment, IoT, and smart TVs.
Experts predicted that Huawei’s IC R&D center in Shanghai will take charge of the operation of its semiconductor plant. While also starting to develop and produce chips.
If Huawei’s semiconductor plant construction succeeds, it will be a big challenge for TSMC and Samsung Electronics. However, industry experts say that Huawei can theoretically produce chips without U.S. parts. But it will be difficult to be competitive because it needs technical know-how such as lowering the defect rate in the actual process.
Currently, TSMC and Samsung Electronics are leading the way with chip production technology of the 5-nano process. Which is a state-of-the-art technology. And as the experts have observed, Huawei, which aims to develop 28-nano or 20-nano chips, will not be able to keep up with this gap.