SMIC In Violation Of US Sanctions; Qualcomm's Bad Stock Day

General news News Tech Tech News 09/08/2023

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TECH NEWS – According to a US congressman, the Chinese chipmaker has provided Huawei with the Kirin 9000S, violating the country’s sanctions on China.

The Kirin 9000S can be found in Huawei’s latest flagship phone, the Mate 60 Pro 5G, but the Chinese tech giant could not have used this chip without SMIC. The chipmaker, also from China, has provided its second-generation 7-nanometer process for mass production of the system board. While it also sounds relatively modern, it is outdated compared to Taiwan’s TSMC’s 3-nanometer technology. According to Michael McCaul, Bloomberg reported that SMIC should have applied for an export license from the US before shipping the Kirin 9000S, but that by not doing so, the company violated sanctions.

Another lawmaker, Mike Gallagher, says that Huawei and SMIC should be cracked down on, Reuters reports. We used to hear that SMIC couldn’t even get the chipmaking equipment from the Dutch ASML but fine-tuned the simpler DUV machines to get around the bans. Meanwhile, a new ban has been imposed on Chinese government employees: they are prohibited from using foreign technology or Apple’s iPhones! Huawei was already on a blacklist in May 2019, and SMIC reached it in 2020.

Apple and Qualcomm share values (and therefore market capitalization) have fallen on the news of the Chinese ban. Qualcomm has come to it because Huawei is supposedly switching to SMIC’s SoCs in 2024, thus depriving Qualcomm of orders for 60 million silicons and billions of dollars. Apple showed a 5.1% drop (its value consequently plummeted by $212 million), and Qualcomm, with a 7.4% drop, can also be ashamed, and they have to prepare for a price war in chipsets to keep their products competitively priced, which will result in a drop in profits.

Huawei, despite the bans, has bought 40-42 million chipsets from Qualcomm this year, which will now have to rely on sales of 5G modems… but Apple is already working on that, and their solution is supposed to debut in 2025, so a major Qualcomm customer could soon stop ordering from them. The Kirin 9000S can’t compete with the Snapdragon 8 Gen 3 in either power efficiency or performance…

The bans, in this case, don’t seem to have much effect.

Source: WCCFTech, WCCFTech

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Angyal Anikó

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