For over four years, Huawei has been on a US entity list, which has stopped American companies from selling them hardware and software. As a result, Huawei's access to 5G chipsets was also cut off. A few reports recently suggest that Huawei might regain the marketplace of 5G smartphones by jointly developing 5G chipsets with Chinese chip manufacturer; Semiconductor Manufacturing International Corporation (SMIC).

Background of the restriction imposed on Huawei

After being placed on the Entity List by the U.S., Huawei, which was on the verge of becoming the world's largest smartphone manufacturer, experienced a significant decline in its consumer revenue. It forced the company to rely on Snapdragon chipsets modified for 4G networks instead of offering 5G connectivity.In 2020, the company's revenue amounted to around $67 billion, but it dropped by half to approximately $33.5 billion in 2021.

5G Chipset Development

According to reporters in the Chinese smartphone market, Huawei and SMIC are working together to develop the 5G chipsets using Huawei's software tools and SMIC's manufacturing process. The 5G chips will rely on the ARM architecture, utilized by Qualcomm and other chipmakers as well. This means that various devices, including smartphones, laptops, and tablets, can incorporate Huawei's chips.SMIC's manufacturing process is similar in terms of power and stability to the 7nm process used by other competitors, despite not being officially 7nm. It is worth it for Huawei to use its own 7nm chipset that supports 5G than relying on 4nm Snapdragon chipsets that cannot work with 5G signals.

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Challenges on Huawei's Path

While this chipset appears promising, Huawei will have to face challenges to make a place in the market standing with its latest chipset. Semiconductors manufactured using Huawei’s EDA tools and SMIC production may have a relatively low yield rate of 50%. This means that out of every 100 chipsets produced, less than 50 will meet the quality standards.

Huawei's 5G Chipset Availability

Huawei's 5G chips are still in development, but the company might probably start shipping them in the second half of 2023. The forecasts suggest that initially, there might be around 2 to 4 million units of these 5G chipsets available, with a possibility of reaching 10 million units in the future. The first Huawei phone featuring this newly developed 5G chipset might come to market later this year.

• Meanwhile, check out our review of Huawei Band 8.