The U.S. trade sanctions have forced Huawei into a corner, along with other Chinese entities, who previously used to source TSMC’s 7nm technology for various applications, but even that option has been severed. While SMIC, China’s largest semiconductor manufacturer, exists to fulfill the new demand, it cannot circumvent the low yield issues that are creating a wave of problems for its new customers, including Huawei. With few alternatives remaining, a new report states that a revival of a business relationship with Korean firms could be on the horizon.
U.S. sanctions have also put Korean firms in a tough position, meaning that these companies will have some monetary benefit by teaming up with Huawei
An unnamed official spoke with Korean reporters on the condition of anonymity, with The Korea Times mentioning that before the ‘ban hammer’ was enforced, there was a massive partnership where the procurement of chips worth $10 billion annually was taking place with Samsung and SK hynix. With the sanctions in place, even Korean firms are experiencing a toll.
“Before the sanctions, there was considerable cooperation with Korea in the semiconductor sector. We purchased about $10 billion worth of chips annually from Samsung and SK hynix. However, since the U.S. sanctions, we can no longer procure semiconductors from them. This has undoubtedly caused losses for Korean companies.”
Unfortunately, while there might be talks going on in the background, it is unlikely that anything fruitful will materialize between Huawei, Samsung, and SK hynix, and that is thanks to the Trump administration. Talking about potential trade policies, the Huawei spokesperson said that it is difficult to comment on a hypothetical situation, but when the initial sanctions were imposed, the company was put in an extremely difficult situation.
Huawei has made attempts to catalyze the process of wafer manufacturing, and by teaming up with SMIC, it successfully developed the 5nm process. Unfortunately, the low yields due to the use of older-generation DUV equipment means that commercializing this technology has proven to be a challenge. Other tactics have been utilized by Huawei, such as luring TSMC engineers to work for the company in exchange for receiving triple their current salary.
It is likely that the U.S. authorities will become an impenetrable obstacle between Huawei and these Korean firms, but it will still be interesting to see how things play out. At least we can admire the tenacity of these firms when pursuing every possible avenue for chip manufacturing.
News Source: The Korea Times
About the author: Omar Sohail is a reporter and analyst for Wccftech's mobile section, specializing in the technology and business of the mobile industry. His expertise lies in the intricate hardware supply chain, covering developments in semiconductor manufacturing, chip lithography, and camera sensor technology.
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