Huawei to Build Foundry Fab

The author is an analyst of NH Investment & Securities. He can be reached at hwdoh@nhqv.com. -- Ed. 

 

Despite US sanctions, China’s semicon technology capabilities are growing. SMEE and Hans Laser are developing lithography equipment, Giga Devices has completed the development of 19nm DRAM, and Huawei plans to build a semicon foundry fab.

Chinese players developing semicon lithography equipment

Despite US restrictions on the Chinese semicon industry, China’s semicon technology capabilities are steadily rising. The Chinese companies Hans Laser and SMEE are in the process of localizing lithography equipment, which has the greatest technological importance among semicon equipment. That said, the resolution of the equipment developed by Hans Laser is 3~5µm, which is still way behind mainstream technology.

The 28nm lithography equipment that SMEE plans to release by end-2021 can produce most of the semiconductors currently used in China. If the equipment is successfully launched, it is likely to replace a significant portion of equipment imports. Giga Devices, a company that develops NOR flash, plans to release 19nm DDR4 DRAM in 1H21. It also aims to launch 17nm products. Giga Devices hopes to sign a supply contract with CXMT, which will significantly increase its production volume.

Huawei to build foundry fab

Huawei, which has been heavily sanctioned by the US, has begun construction of a semicon foundry fab in Wuhan to become self-sufficient. With operation targeted for 2022, the firm plans to produce optical communication semiconductors and modules for its own communication equipment.

In 2020, due to US sanctions, TSMC, which had previously traded with Huawei, cut off consignment production relations, and Huawei’s semiconductor supply was severely affected. Huawei’s subsidiary, HiSilicon, saw its semicon shipments fall 88% y-y in 1Q21. In response, Huawei has decided to build its own foundry, with the goal of achieving self-sufficiency in semiconductor fabrication.

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