Huawei’s semiconductor breakthrough challenges Apple in China amid US sanctions

Huawei’s recent semiconductor breakthrough poses a fresh challenge for Apple within the Chinese market and has triggered concerns in the US China’s largest semiconductor manufacturer, SMIC, has engineered a chip that holds the potential to rejuvenate Huawei’s smartphone business, notwithstanding the sanctions imposed by the United States.

Named the Kirin 9000S, the chip employs a 7nm manufacturing process, representing a notable advancement for SMIC, which had previously struggled with this technology. Nevertheless, uncertainties remain regarding the effectiveness and profitability of this process on a larger scale, particularly concerning chip yield.

For Apple, Huawei’s resurgence in China presents a substantial challenge, as the Chinese company can provide high-end smartphones equipped with state-of-the-art technology. While geopolitical tensions persist, Huawei’s technological progress may prove to be a more significant obstacle for Apple within the Chinese market, potentially enticing Chinese consumers with innovative offerings such as foldable phones.

Why does this matter?

Huawei found itself cut off from essential technologies, including 5G chips and Google software, which severely impacted its smartphone division. Previously, Huawei relied on Taiwan Semiconductor Manufacturing Co. (TSMC) for chip production, but restrictions on exports halted this partnership.

These developments have spurred the US Department of Commerce to seek additional information about Huawei’s chip and have underscored vulnerabilities in the US export restriction strategy. This raises questions about the effectiveness of US sanctions and export restrictions, potentially influencing future U.S.-China relations and trade policies.