SMIC to create R&D team to investigate 3nm chip production for Huawei

Semiconductor Manufacturing International Corporation (SMIC) is China's largest foundry and since U.S. sanctions prevent it from obtaining extreme ultraviolet (EUV) lithography equipment, SMIC must use its older deep ultraviolet (DUV) lithography gear to build application processors using its 7nm node. That is how Huawei was able to obtain the Kirin 9000s 5G chipsets it uses for the Mate 60 series. That chip stunned U.S. lawmakers who thought that they had blocked Huawei from receiving any new 5G SoCs.

Last month, we told you that a Financial Times report said that SMIC has figured out how to produce 5nm chips using DUV lithography. The lithography machines are used to etch  extremely thin circuitry patterns on silicon wafers and to accommodate the billions of transistors found in cutting-edge chips these days, these lines must be thinner than a human hair. Currently, the iPhone 15 Pro and iPhone 15 Pro Max are the only smartphones powered by an application processor made using the 3nm process node.

To make this as simple as possible, lower process node numbers (for example, 3nm compared to 5nm) means that the transistors that a chip is equipped with are smaller. Smaller transistors mean more of them can fit inside a chip and that is the big deal; the higher a chip's transistor count, the more powerful and or energy-efficient that chip is. We could see mass production of 2nm chips in the second half of 2025 from Samsung Foundry and TSMC while Intel's 18A chips will use a 1.8nm process node. Come late 2027, we could see Samsung Foundry, TSMC, and Intel building chips using a 1.4nm node.

Earlier this year The Financial Times said that SMIC will use its DUV machines to build 5nm chips for Huawei and manufacture other chips including those that are used for AI capabilities. Per Wccftech, SMIC is not stopping there. The latest report says that it has created a Research & Development team inside the company to work on 3nm production. Without an EUV machine, this is going to be a difficult task resulting in low yields and high production costs. However, SMIC expects to receive huge subsidies from the Chinese government.

SMIC's use of its DUV machines would force it to price its chips 50% higher than leader TSMC at comparable nodes. Unless the U.S. loosens its restrictions, which is not seen as likely anytime soon, by the time SMIC can produce 3nm chips for Huawei and others, the leading foundries will be at 1.4nm or even lower. But Apple and Samsung shouldn't relax. Even with a 7nm chip powering it, sales in China of the Mate 60 Pro have been tremendous.