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Huawei is an example of what we can do to China?

Huawei was the hottest star in the global smartphone world until China didn't get the message. Then we sanctioned the company and their global market share went from 12% to 2%.

Listen China, still want to mess with us? Steal our technology or freeze us out of your local markets. Mess with Hong Kong and Taiwan? Guess how that's going to work out for you.

We're the baddest dog in the pound. We may not be able to do much in the Ukraine, but we know how to kick you where it hurts (without firing a missile).

Huawei’s Breakthrough Still Shows China’s Limits in Tech Race

New phone from sanctioned company doesn’t mean China can keep up with global tech

By Jacky Wong, WSJ

Sept. 7, 2023 8:31 am ET

A new smartphone from China’s Huawei Technologies has caused a stir. But on closer inspection, it says as much about the country’s challenges as its promises in a divided technology landscape.

The company surprised everyone last week when it quietly unveiled the Mate 60 Pro—its new smartphone that apparently comes with 5G capabilities. Huawei has mostly been selling 4G phones since 2019, when the U.S. imposed sanctions restricting its access to advanced chips. It had 12% of the global smartphone market when the U.S. sanctions hit but its share has since fallen to 2% last year, according to Counterpoint Research. That number excluded budget brand Honor, which it sold in 2021, partly due to the sanctions.

There are indeed causes for celebration for the company and China’s chip industry. According to a teardown by industry research firm TechInsights, the main chip inside this new phone is made using technology comparable to the so-called 7nm process. It is possibly made by China’s leading chip foundry Semiconductor Manufacturing International, or SMIC, said TechInsights.

That is still generations behind the market leaders. For example, Taiwan Semiconductor Manufacturing, or TSMC, has already been mass producing more advanced 3nm chips. But that nonetheless is still a big step forward, especially given the limitations China’s chip makers are facing.

While SMIC has no access to the most cutting-edge extreme ultraviolet lithography machines, it could use some older equipment to make advanced chips, likely using a process called multipatterning. The process, however, could involve higher costs and lower production yields. Still, the breakthrough indicates how the U.S. sanctions seem to have galvanized the Chinese state and industry players to work together toward a common goal.

But Huawei and SMIC will likely be able to push ahead at most only another generation using the multipatterning process. Going further could be harder as it will be difficult for them to get their hands on the most advanced chip-making tools.

Sanctions are stepping up to include even some older machines too, and chances are that the restrictions could get even tighter. On top of trying to make the chips, China could ultimately need to manufacture its own chip-making equipment, too. Meanwhile, leading players such as TSMC are still advancing, widening the gap with China.

Huawei’s new phone is a significant achievement for a Chinese company facing U.S. sanctions. But China’s semiconductor industry, and its broader tech ecosystem, look destined to lag behind the U.S. and its partners for the foreseeable future.

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