Huawei is to plan its own semiconductor factory, a so-called fab, in Shanghai. The Financial Times reported , citing company-related sources from the Chinese manufacturer. In September 2020, the world's largest contract manufacturer, TSMC from Taiwan, stopped production for Huawei.
The reason for this stop is pressure from US regulatory authorities, which would otherwise restrict the export of necessary equipment from Applied Materials and Lam Research. Only TSMC is able to produce very modern chips with 7 nm DUV or 5 nm EUV technology in the quantities that Huawei needs for the Kirin 9000, for example.
As an alternative solution, Huawei has costly switched to the 14 nm process from SMIC, for example for the Kirin 710A; the original design was laid out as the Kirin 710 for TSMC's 12FFC process. SMIC is the largest Chinese semiconductor manufacturer in China, but the Trump administration is said to be considering adding this foundry to the entity list in order to cut off Huawei's supplies.
An in-house fab would be extremely expensive; such semiconductor factories usually cost billions of dollars. Huawei should therefore plan to work as a partner with the government-funded Shanghai IC R&D Center. The first expansion stage of the fab is planned for the end of 2021, then production is to start in the old 45 nm node and gradually expand to 28 nm; both methods are suitable for IoT and smart TV chips.
Huawei finally wants to upgrade 20 nm by the end of 2022 in order to be able to produce designs for the important network and telecommunications sector, e.g. for 5G base stations. For the time being, it remains to be seen where Huawei and Shanghai IC R&D Center want to get the corresponding equipment such as scanners. It is conceivable that manufacturers such as ASML, Canon and Nikon will sell their exposure machines for this purpose, but this is not guaranteed.
In the past, the US government has already put pressure on the Dutch market leader ASML so that an EUV system intended for SMIC is not delivered or delivered with a delay. The extreme ultraviolet radiation for all nodes coarser than 7 nm would not be relevant anyway, but the US government could interfere even with classic immersion lithography. Chinese companies would also have to be found here.