Huawei is planning new smartphone chips this fall as competition with Nvidia and Apple heats up

SHANGHAI – Chinese tech giant Huawei on Monday unveiled a new way to develop advanced semiconductors despite US sanctions, as Nvidia is struggling to sell its high-end chips in China.

Huawei said it has developed a new engineering method called “LogicFolding” to make Kirin smartphone chips this fall.

That success comes as Nvidia faces US export restrictions on China as well an apple it faces renewed competition from Huawei in the world’s second-largest consumer economy.

Huawei’s Mate 60 smartphone, launched in 2023, features 5G connectivity powered by an advanced chip that is helping the company regain market share from Apple.

While US restrictions have kept Nvidia from selling its most advanced chips to China in recent years, Beijing has tended to support domestic technology instead. Last week, Nvidia CEO Jensen Huang told CNBC that the American chip maker had “ceded” the Chinese market to Huawei.

“For Nvidia, this means that the window to sell advanced chips like the H200 to China is narrowing,” said George Chen, partner and chairman of the digital practice at Asia Group.

“This trend will increase concern in Washington, where Huawei remains a symbol of America’s export restrictions,” he said.

Huawei said that by 2031, its new chip technology could deliver power equivalent to 1.4-nanometer process technology – while global chip leader TSMC has begun volume production of 2-nanometer chips.

Nanometer processes refer to chip manufacturing technology, with smaller nodes typically allowing for faster and more efficient semiconductors.

Paul Triolo, head of technology, Asia and the Americas, at DGA Group, was skeptical of Huawei’s 1.4-nanometer claim.

“A stacked/folded design can produce practical density gains, but it doesn’t mean that Huawei has solved the complete process, yield, power, thermal, and device performance issues associated with true 1.4 nm-class manufacturing,” he said.

Blocked from testing extreme ultraviolet, or EUV, lithography equipment from a Dutch chip maker ASMLHuawei has been forced to pursue other methods of chip development as it seeks to remain competitive in AI, said Neil Shah, vice president of research at Counterpoint Research.

“However, this method of parallel semiconductor is still not proven at scale. This method can introduce difficult thermal barriers and packaging complexity that can not hit the production yield,” said Shah.

Huawei’s efforts to deploy the technology in its Mate 90 smartphone series this fall will mark an engineering feat, but its access to AI datacenters will serve as China’s “ultimate litmus test for Western sanctions,” he added.

Huawei is also seeking more academic recognition for its semiconductor research. On Monday, the company described its findings as the “Law of Tau,” or “τ scaling,” and said it addresses challenges facing the semiconductor industry.

Huawei said it has designed and mass-produced 381 chips based on the “τ Scaling Law” over the past six years.

Semiconductor development has, for decades, relied on “Moore’s Law,” the idea that the number of transistors can double roughly every two years – bringing more computing power while lowering costs. However, even Nvidia’s Huang said that Moore’s Law no longer applies to future chip development.

“Huawei is turning engineering strategy into ‘law’,” Triolo said.

The new goal is “more than system-level theory: shorten wiring, stack logic, improve memory semantics, and co-design chips, packages, software, and assemblies,” he said.

Still, challenges remain around heat management and scale production, Triolo said.

Huawei’s new chip structure expands the structure from one layer to two, which greatly increases energy efficiency, according to Tingbo He, president of Huawei’s semiconductor business.

This structure allows transistors to interact with each other in many places, He, who is also the director of the company’s scientific committee, at the Institute of Electrical and Electronics Engineers’ International Symposium on Circuits and Systems.

However, he acknowledged that challenges remain, as Huawei has just begun a ten-year development path for new technologies.