China’s largest chip maker is preparing for US sanctions

China’s largest chip maker is preparing for US sanctions

According to the report published by After Huawei Mate 60 and Mate 60 Pro phones with HiSilicon Kirin 9000S chip produced by them were launched, Chinese company SMIC has placed a huge order for raw materials to its Taiwanese partners. This matter becomes important because the supply of Mate 60 with the Kirin 9000S chip is a clear violation of US sanctions. The price of Huawei Mate 60 in the basic model starts from 750 euros.

Observers of the chip industry, quoted by this publication, believe that the contractor that manufactures chips for new Huawei phones is anticipating tougher sanctions from the United States, and fearing this, it is stockpiling the raw materials it needs. Of course, other reasons can also be involved in this move.

According to reports, SMIC recently approached its partners in Taiwan and placed a substantial order (equivalent to about 2 years of raw materials).

Some people believe that this move is to ensure the steady supply of raw materials for the production of 7 nm chips of this company and their future vision, and it can be an effort and a plan to increase the supply of the product according to the increase in customer needs; While for others, SMIC’s motivation for stockpiling raw materials on this scale is still unclear, and they think that such an order shows the aspect of preventive measures against potential new restrictions from the United States and preparing for conditions after more difficult US sanctions.

Huawei has high hopes for its Mate 60 series smartphones and predicts that it will be able to launch 20 million units by the end of this year if the supply is stable and subsequently released to the market. Of course, the release of these phones will continue next year and their sales are expected to increase. Also, Huawei will probably introduce other phones with the Kirin 9000S chip; Therefore, the company’s need for SoC will increase increasingly. Therefore, the purchase of primary raw materials by SMIC to continue the 7nm chip production process and respond to Huawei’s needs seems logical.

Not only SMIC, but most Chinese chipmakers are no novices when it comes to raw material storage and warehousing, and in anticipation of US sanctions and restrictions, in recent months they have imported almost all chipmaking equipment they could get their hands on from Europe, Japan and the US. .

What is your opinion of Zomit users about the reason for placing a huge order of primary raw materials by the Chinese company SMIC?

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