Apple will show Huawei a clean pair of heels, but the iPhone will fail in China: here's why

Apple will show Huawei a clean pair of heels, but the iPhone will fail in China: here's why
Huawei is off to the races! The Chinese behemoth took uppercuts from US-led sanctions for several years but now, in recent rounds of this fight, Huawei managed to get up and prove its worth.

After all, they released the Mate Pro 60 last year and it got US officials the night sweats. After all, Huawei is so heavily sanctioned by the US that this 5G-capable phone should have never materialized in the first place.

Huawei, however, will stay behind Apple in the near future. Here's why, in my humble opinion, that doesn't bother Huawei in the slightest bit!

Rumors are now suggesting that SMIC (the third-largest foundry in the world after TSMC and Samsung) and Huawei can create 5nm chips using older UV lithography machines.

In order to get a better understanding of why that's crucial for Huawei and what it means, we have to go back in time.

But first, let's set some things straight and explain these pesky tech-savvy terms! You'll be needing those for this article!

On chips, chip foundries and UV machines

Smartphone chips, often called processors or SoC (System on a Chip), are the brains of a smartphone. They handle all the tasks, from running apps to connecting to the internet. These chips are incredibly tiny and complex, with billions of transistors (tiny electronic switches) packed into a small piece of silicon. The smaller the transistors, the more can fit on a chip, making it more powerful and efficient. This is why new smartphones often have better performance and battery life – they have newer chips with more transistors.

Chip foundries are specialized factories where these chips are made. They use advanced machinery to carve out these tiny transistors onto silicon wafers. One of the crucial tools in a chip foundry is the ultraviolet (UV) lithography machine. These machines use UV light to etch patterns onto the silicon wafers. Think of it like using a stencil and a flashlight to draw tiny circuits on the silicon. The more precise the machine, the smaller the transistors it can create.

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The term "nm nodes" refers to the size of the transistors on the chip, measured in nanometers (nm). A nanometer is one-billionth of a meter, which is incredibly small. Many of today's chips are at the 5nm node, meaning the transistors are just 5 nanometers wide. This is a significant achievement because smaller transistors mean more can fit on a chip, improving performance and energy efficiency.

However, making these tiny transistors requires very advanced technology, which is why there's excitement when companies, like SMIC and Huawei, reach new milestones in chip production.

Okay, now let's have some analysis!

Huawei's success made people across the world smile

Up until 2020, Huawei enjoyed substantial success in the global smartphone market, positioning itself as a major player alongside Samsung and Apple. What I mean by that is: people enjoyed Huawei-branded smartphones and what the brand had to offer in terms of innovative technology.

Huawei's smartphones gained recognition in big part for their advanced cameras and robust battery performance. The cameras were co-engineered with Leica. My father, a professional photographer, used a P-series phone on numerous occasions for reports, landing first page photos in a local newspaper.

The company's aggressive expansion beyond China into markets like Europe and Asia was supported by a diverse product range that catered to all types of users: budget-conscious, mid-ranger aficionados, and, of course, those who were after premium devices.

You, people were smiling, holding their Huawei phones across the world!

And then…

Huawei wiped the smile off of some US officials

In 2019, Huawei faced a significant setback. The United States said Huawei phones pose a thread (because of privacy issues) and imposed sanctions on the company. These sanctions restricted American firms from doing business with Huawei, particularly in supplying key technologies and software essential for its smartphones.

One of the most critical impacts was the loss of access to Google Mobile Services (GMS), which includes popular apps like Gmail, Google Maps, and the Play Store, on Huawei's new smartphones. This meant that Huawei phones released after the sanctions could no longer come pre-installed with these familiar Google apps, affecting their appeal to international consumers who rely on these services.

The U.S. government argued that Huawei's close ties to the Chinese government posed a potential risk of espionage and unauthorized data access, particularly through Huawei's telecommunications equipment. As a result, the U.S. placed restrictions on American companies supplying Huawei with critical components and technology necessary for building and expanding 5G networks.

These sanctions significantly disrupted Huawei's supply chain and international sales.

Dawn of the rise of the glimpse of Huawei's resurrection

Okay, that's a direct reference to the "Rise of the Planet of the Apes" and the "Dawn of the Planet of the Apes" flicks.

Enter August of 2023. The Huawei Mate 60 Pro is live.

This left some US officials full of sound and fury. They angry because Huawei, after all US-imposed restrictions, wasn't meant to have and use a 5G-capable SoC?

The phone is a hit – reports claims that the US-sanctioned Huawei has sold 1.6 million of its Mate 60 Pro phones in six weeks and calls that a "high-end smartphone renaissance".

Repercussions followed. In April 2024, the Biden administration aimed to persuade the Netherlands to prevent ASML from servicing certain machines in China, marking a step in the US's efforts to limit Beijing's technological advancements.

The Netherlands' ASML equipment plays a crucial role in the semiconductor industry as it dominates the market for lithography tools, essential for creating circuitry on chips. These machines are large, expensive, and complex, performing a critical step in chip manufacturing.

The United States has concerns about ASML maintaining equipment it has already sold, particularly if it could support Chinese chip-making facilities. ASML machines are highly specialized and difficult to replace, making them indispensable for chip production. Denying spare parts and maintenance could effectively halt operations at a Chinese "fab" (chip-making plant), preventing it from producing chips.

Huawei responded with the Pura 70 line, which materialized at the end of April. Pretty impressive stuff, if you ask me.

The future is uncertainly certain

So, now that Huawei is on to producing a 5G-capable 5nm chip on its own, what does that mean? Yes, the company will get to it eventually, heck, they'll squeeze a 3nm, but that's not the point.

For the time being, Huawei will stay behind both Apple and Samsung, who are both moving on the cutting edge 2nm mode SoC technology. Huawei can't catch up with them just yet.

However… that's not the point as well.

The way I see it, Huawei is having zero problems with that, because they've risen from the ashes in their homeland.

The way things are today, users in China will almost always prefer a 5nm Huawei phone to a 3nm iPhone (or other foreign phones).

Why? Because – you guessed it – Huawei is their thing.

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