Hello, everyone, welcome to our this program, today we are going to address the concerns of the
chip suppliers, smic has been out of power, and is becoming the world's largest chip suppliers,
TSMC's biggest competitors, because of the sanctions by the us government policy,
smic semiconductor foundry enterprise production capacity has been greatly weakened,
and by a certain impact, To cope with this situation, SMIC even realized the
transformation of business strategy and upgrading of technology research, which also benefited from
the introduction of China's 14th Five-Year Plan, which provided a huge boost to its development.
Chinese telecom giant Huawei is expected to deliver its first flexible OLED driver
chip to suppliers by the end of 2021, according to media reports on Monday,
in a move that could mark a breakthrough in Huawei's response to the US chip ban.
Industry media reported Monday that the OLED driver chip that controls
the lighting of each pixel in the display was designed by Huawei chip subsidiary HiSilicon,
and pointed out that the OLED driver chip uses 40 nm process technology and is planned
to be mass-produced in the first half of 2022. Sample chips have reportedly been sent to Huawei,
Honor and BOE Technology Group, a Chinese flexible panel manufacturer, for testing.
If successfully rolled out, the move could help Huawei cope with U.S. bans
that make it virtually impossible to manufacture smartphone processors for its high-end products,
resulting in a loss of market share and smartphone shipments, analysts said.
Li Gang, chief executive of the Beijing-based Information Consumption Alliance, told the
Global Times on Monday that if OLED chips could not be imported, the manufacturing
of mobile phones would be affected. Since the United States issued a chip
ban on Huawei, global foundries have been unable to produce advanced chips such as 14-,
7-and 5 nm for Huawei. These bans have also affected Huawei's flexible OLED
cooperation with Samsung and other companies. As the OLED driver chip mainly adopts 28-,
40- and 55-nm chips, Huawei has been able to find more foundries to make the chip, as the production
process is not as complicated. The self-produced OLED driver chip will be rather lucrative for
Huawei, as the chip can be widely used in products such as TVs, screens and cameras, analysts said.
It is expected that 584.5 million smartphone OLED panels will be shipped in 2021,
up 28 percent year-on-year. In this segment, China's OLED sector is entering a large-scale
competition, and shipments are expected to exceed 100 million pieces for the first time in 2021,
bringing huge market opportunities to OLED driver chips, according to research institute Omdia.
OLED driver chip makers in the Chinese mainland can't keep up with domestic demand. If Huawei's
HiSilicon enters the market, it would have a chance to share in the fast-growing OLED driver
chip market in China, said industry insiders. "China has the world's most complete industry
chain for making chips. Thus, the industry has the capacity to develop and make breakthroughs for any
type of chips, without strict limitations," said Xiang, adding that China has been making
all-round, diversified efforts to produce chips to solve such bottleneck problems.
The Huawei Kirin 710A chip, based on 14-nm semiconductor technology,
went into commercial mass production in May 2020. It was the first purely Chinese chip
with independent intellectual property rights. U.S. President Donald Trump's administration
is reportedly taking additional steps to sever Huawei's access to critical technology
by revoking or rejecting licenses to some of the Chinese tech giant's key suppliers.
Reuters broke the news on Sunday, citing "people familiar with the matter."
A spokesperson at Huawei declined to comment on the report to Fortune
and could not confirm whether or not the company's suppliers would be forced to cut ties with Huawei.
After the Reuters report published Sunday, stocks for chip makers and manufacturers across
Asia fell on Monday in a sign that investors are losing confidence that companies will be
able to continue supplying Huawei with chips and other components it desperately needs.
The new action against Huawei ban is only the latest in a string of harsh measures the
Trump administration has taken against the tech giant it characterizes as a national security
threat. (Huawei denies the allegation.) In May 2020, Trump's administration banned
Taiwanese chip giant, the Taiwan Semiconductor Manufacturing Corporation, from supplying Huawei
with semiconductor chips. In August, the U.S. Department of Commerce went further,
saying that any chip manufacturer globally would have to apply for a license from the U.S.
in order to continue supplying Huawei with chips. The U.S. has the power to dictate which companies
supply Huawei with semiconductors because virtually all chipmakers rely, at least in part,
on American technology to produce their products. The U.S. actions against Huawei in 2020
effectively starved Huawei of the components it needs to make smartphones.
"Huawei's mobile phones have no chip supply," Richard Yu, CEO of Huawei's consumer business
group, said in August 2020. Yu also acknowledged that the U.S.'s attacks on Huawei's chip supplies
amounted to "a huge loss" for the company. The U.S., however, did not completely
restrict Huawei from accessing chips. In September, the U.S. reportedly provided
licenses to American chipmakers like Intel and AMD to continue selling Huawei chips.
The U.S.'s latest broadside against Huawei, which has reportedly been in effect
since at least Friday, appears to be a more comprehensive ban on Huawei chip suppliers.
The U.S. Commerce Department reportedly revoked up to eight licenses from four
companies supplying Huawei. The U.S. Commerce Department also may deny a "significant number" of
license requests from other companies, the U.S.'s Semiconductor Industry Association told Reuters.
China's chip imports climbed to nearly $380 billion in 2020, or about 18 percent of total
domestic imports, as the U.S. ban prompted companies like Huawei to stock up on chips.
China bought nearly $32 billion of equipment for chip production from Japan, South Korea,
Taiwan and elsewhere in 2020, up 20 percent from 2019, according to
a Bloomberg analysis of official trade data. "In the short term, China will rely on imports
to improve its chip manufacturing." "China does not yet have the capacity to produce
the chip-making equipment needed for advanced processes," said Wang Dan, technology analyst
at Gavekal Dragonomics. But China is investing heavily and success will take more than a decade."
Chinese chipmakers like SMIC are buying more of the equipment needed to make silicon wafers
and chips. China has become the largest market for semiconductor equipment in 2020, according
to a December report by The International Semiconductor Industry Association (SEMI).
Chinese chip imports surged about 14 percent in 2020 as Chinese companies stocked chips ahead of
schedule due to restrictions imposed by the U.S. China's chip imports and exports of smartphones
and PCS have also been boosted by strong demand for PCS as the COVID-19 pandemic
has forced them to work and study from home. According to statistics, China's chip imports
of more than $300 billion come from Taiwan, South Korea, Japan, the United States, Malaysia,
the Philippines and Vietnam. Taiwanese companies, including TSMC, have benefited the most.
Demand for chips will continue to grow in 2021, with the International Semiconductor Industry
Association forecasting in December that global chip sales will grow 8.4 percent this year,
with companies such as TSMC, Intel and Samsung Electronics continuing to benefit.
Chinese chipmaking companies will also continue to buy semiconductor equipment to produce more chips,
which will help companies like Tokyo Electronics and ASML grow sales.
In its report, Reuters specifically named two companies that may be barred from selling
Huawei chips: American chipmaker Intel and the Japanese flash memory chipmaker Kioxia.
Neither firm is listed on Asian markets (and U.S. markets are closed Monday), but stocks
fell for other firms that either sell chips to Huawei or were hoping to do so in the future.
On Monday, the share price for Samsung Electronics,
the South Korean technology giant, fell by over 2%. Samsung Electronics
had applied for a license to supply Huawei with chips without a response from the U.S.,
while its subsidiary, Samsung Display, reportedly received approval from American authorities in
October to sell Huawei its display panels. The share price for Advantest Corporation,
a Japanese chip parts manufacturer, also fell by nearly 1.5% on the Tokyo stock exchange.
In Taiwan, Mediatek, a contract chip manufacturer, saw its share price slide by over 3% on Monday
morning, before recovering to a 1% loss by mid-afternoon on the Taiwan stock exchange.
Shares for Shin Etsu Chemical, a Japanese chemical maker that supplies chipmakers, also dropped by
nearly 3% on the Tokyo stock exchange on Monday. Overall, Asian markets were mostly lower
on Monday. In Japan, the Nikkei 225, an index that tracks the top stocks in Tokyo,
ticked down 1%. The South Korean KOSPI index also fell 2.3%, while Taiwan's TAIEX lost .03%.
For now, it is unclear whether President-elect Joe Biden's administration will continue to
enforce the U.S.'s harsh measures against Huawei after he takes office on Jan. 20.
But industry experts believe that Biden's approach may be similar to Trump's.
"It is clear to us there is continued muscular approach to China in the cards [with the Biden
administration], John Neuffer, head of the U.S.'s Semiconductor Industry Association,
told The Washington Post, in November. Thank you for watching today's video.
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