Huawei will survive, of course

Huawei people have an unbreakable spirit and dedication. If that isn’t enough, the Chinese government will do whatever it takes to protect Huawei. It’s a $120 billion company with almost 200,000 employees. Imagine what the U.S. would do if China decided to destroy Facebook, where so much hate spreads. We would protect it, although Facebook is 40% smaller than Huawei. Germany would never let Daimler disappear.

I’m doing the research and it’s becoming clear China will be able to produce the needed chips and components. The next two or three years could be very hard, especially on Huawei’s mobile phone sales, but the improved Chinese chip and software industries will be a major economic asset.

Hongmeng/Harmony is catching up to Google’s Android system. Software is not the problem. Google’s system is mostly 10 years old. It’s hard to implement the latest software advances into old code. With fresh code, Hongmeng has faster file operations and other improvements.

Replacing Taiwanese chips will be more challenging.

Not even Intel can keep up with TSMC’s 5 & 7 nm production, which has delivered over one billion chips. The best in China is SMIC, at 12-14 nm. For many applications, two 12 nm chips or chiplets can effectively replace a 7 nm chip.

I believe Huawei is ready with a two or three chip solution for 5G radios. It requires a little more space and power and raises costs $10-20. That’s unwelcome, but manageable in a $3,000-10,000 piece of equipment.

High-end phones do require the most advanced chips, like the HiSilicon 5 nm Kirin 1020 Huawei is producing at TSMC. In 2021, SMIC expects to mass-produce chips similar to the early 7 nm Kirin 980 5G of two years ago. The resulting phones will be fast enough for most practical purposes, but not for the most profitable highend phones.

To do better than that requires extreme ultraviolet lithography (EUV,) only available from a Dutch company, ASML. The machines cost $200 million and are extraordinarily complex, as you can see in the video below.

EUV lithography uses light with a wavelength of just 13.5 nanometers (nearly x-ray level), a reduction of almost 14 times that of the other enabling lithography solution in advanced chipmaking, DUV (deep ultraviolet) lithography, which uses 193-nanometer light.

The U.S. has blocked shipments of ASML’s EUV units to China in order to hold back Chinese chipmakers. The common wisdom is it will take a miracle for China to produce an EUV machine. I’ve seen Huawei and China deliver many technology miracles in the last two decades.

One meme is almost certainly untrue: that chipmaking requires American companies. The Washington Post wrote:

There are only a handful of manufacturing toolmakers in the world for semiconductor production, each of which is the only one of its kind and is a necessary part of the process, the executive said. Three of these companies are based in California: KLA-Tencor, Applied Materials and Lam Research. Remove any one of these companies and it’s impossible to build a chip, the executive said.

My research is finding alternatives to the main machines of those vendors.

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