The rise of Huawei's Kirin chips and the impact of U.S. sanctions
Huawei's Kirin chip has been the core processor of Huawei's smartphones since its launch in 2014. With the world's leading process technology and powerful processing power, Kirin chips have enabled Huawei's mobile phones to excel in performance and power consumption, making them the pride of China's semiconductor industry.
Kirin chips are produced in Wuxi, Jiangsu Province, China, where local chip manufacturers in China are gathered. HiSilicon has cooperated with well-known enterprises such as SMIC and China Resources Microelectronics to jointly escort the production of Kirin chips. In the context of the Chinese government's strong support for the development of the semiconductor industry, Kirin chips have grown rapidly and become an important business card representing China's chip strength.
Since 2019, the U.S. government has imposed severe trade sanctions on Huawei, depriving it of access to key chip design software and manufacturing tools. This has brought great challenges to the development of Kirin chips. Despite this, Huawei is still making unremitting efforts to overcome many difficulties through independent innovation.
In September 2022, Huawei released the Mate 50 series of smartphones that support Beidou satellite messaging, becoming the world's first mass smartphone to support satellite communications. In March 2023, Huawei once again launched the P60 series and the Mate X3 folding phone that support two-way satellite communication. By the end of August, Huawei quietly released the Mate 60 Pro mobile phone equipped with SMIC's 7nm Kirin 9000S chip, whose performance is comparable to the latest iPhone 5G version, which is regarded as a major breakthrough in China's chip independent innovation.
The strength of domestic chips has declined sharply, and the development of related industries has suffered a heavy setback
After the suspension of Huawei's Kirin chip, other domestic chip companies were unable to fill the vacancy in the short term due to limited technical level and insufficient production capacity. This has led to a sharp decline in the overall strength of China's chips, falling out of the top 20 in the world.
According to sources, this is mainly due to the following reasons:
China's chip industry started late, and there is a certain gap between it and the international advanced level. Although great progress has been made in recent years through heavy investment, it still lags behind international giants in core areas such as process technology and design capabilities.
China's chip industry chain is relatively scattered, and there is a lack of strong leading enterprises to integrate resources. Chip design, manufacturing, packaging and testing and other links are scattered in different enterprises, lacking efficient collaboration, and it is difficult to form a joint force.
China's chip industry has insufficient talent reserves and a lack of high-end talents. Due to the relatively short development time of the semiconductor industry, the training of high-level compound talents cannot keep up with the growth of demand.
China is highly dependent on foreign supplies for key chip manufacturing equipment and electronic design automation tools. Once it encounters a technological blockade, it will seriously affect the development of the chip industry.
The sharp decline in the strength of domestic chips has dealt a heavy blow to China's mobile phones, communications, computers and other related industries. Taking the mobile phone industry as an example, brands such as Huawei, Xiaomi, and OPPO could not obtain sufficient chip supply, and the pace of new product releases slowed down, and their market share fell sharply. ZTE, Xinhua III and other telecommunications equipment manufacturers have also suffered.
Accelerate the pace of independent innovation and realize the independence and controllability of the chip industry
In the face of the sharp decline in the strength of domestic chips, the Chinese government and enterprises have realized the severity of the problem and have taken a series of countermeasures to accelerate the independent innovation of the chip industry.
The central government has issued a series of supportive policies to significantly increase financial investment in the chip industry. In June 2020, the State Council issued the "Several Policies for Promoting the High-quality Development of the Integrated Circuit Industry and the Software Industry in the New Era", proposing a number of support measures such as tax incentives, investment and financing support, and talent training. In October 2022, the State Council once again issued the "Opinions on Accelerating the Cultivation and Expansion of a New Generation of Artificial Intelligence, Big Data, Cybersecurity, New Materials and Other Industries", listing the integrated circuit industry as a key development area.
Local governments are also taking active actions to build a highland for the local chip industry. Local governments such as Shanghai, Beijing, Chongqing, and Wuhan have successively introduced support policies to attract chip companies to settle in the local area. Some localities have also set up special funds to support the development of local enterprises.
Chinese companies have increased their investment in independent research and development. From design to manufacturing, from materials to equipment, breakthroughs are accelerating. SMIC, for example, has developed 14nm and 7nm process technologies and is working on 5nm and 3nm technologies. Domestic CPU companies such as Loongson, Shenwei and Haiguang are also constantly innovating.
China is vigorously cultivating chip talents. Tsinghua University, Peking University and other colleges and universities have increased the enrollment of integrated circuit majors, and carried out industry-university-research cooperation with enterprises to cultivate compound talents. Some places have also introduced policies to attract overseas chip talents to return to China to start businesses.