Technology Apr 29

Huawei, SMIC to jointly develop chip  

Move aimed at overcoming supply obstacles placed on Chinese tech giant by US sanctions 

by Nadeem Xu
Huawei, STMicroelectronics to jointly develop chip  
SMIC’s headquarters in Shanghai.

(ATF) Huawei and STMicroelectronics (SMIC) will jointly design chip, in addition to smart phones, it also includes semiconductors for the automotive sector (e.g. self-driving), according to the Nikkei News on Tuesday.

As a partner of Tesla and BMW, STMicroelectronics' move may help Huawei develop self-driving car technology. 

STMicroelectronics is one of the world's largest semiconductor companies and ranks first in the world in discrete devices, mobile phone camera modules and automotive integrated circuits.  Its top 10 customers by 2019 include Apple, Huawei, Bosch, Samsung, Tesla, HP, etc.

China is the world's largest chip consumer, but its market has always been highly dependent on foreign manufacturers.

Data show that China accounted for 33% of the world's total chip consumption in 2018, higher than the the US and Europe combined. However, China's chips account for only 3% of global supply.

In February, Washington indicated it may tighten regulations requiring overseas companies that use US manufacturing equipment to obtain permission before supplying chips to Huawei.

The company is now actively taking measures to ease any potential choke to supply and has begun gradually transferring production of its internal design chips from TSMC to SMIC. Previously, SMIC was only a chip supplier to Huawei.

The deal would enable Huawei to obtain software products from American companies such as Synopsys and Cadence Design Systems. In addition, it will help the Chinese company to lessen its dependence on specific suppliers.