Internet & Tech

Chipping away

Huawei claims series of ‘firsts’ for new microchip

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In ancient times, the appearance of a Kirin, or Qilin in other parlance, was deemed a rare and auspicious event that heralded an era of peace and prosperity.

The mythical animal, a cross between a unicorn and a dragon, was seen as symbol of gentleness and longevity. It preyed on no other creatures and trod so lightly that it never crushed a blade of grass.

In the modern day the Kirin has been reborn from the hard work of telecommunications giant, Huawei. At the end of August, the Shenzhen-based group debuted its Kirin 980 processor, billed as the world’s first microchip using seven-nanometer (nm) technology.

Its debut, just a few weeks before Apple unveils its own 7nm chip at its traditional September 12 event, represents another leap up the value chain for China’s semiconductor industry.

Beating Apple to the punch at a time of heightened tensions over technology leadership between China and the US, adds to the debate on how far the modern Kirin is removed from its ancestral roots.

Indeed, it is hard to see many similarities between the Kirin’s two incarnations. Longevity isn’t a term commonly associated with the semiconductor industry’s ferociously short and capital-intensive technology cycles. Nor is Huawei renowned for treading particularly lightly, if its critics are to be believed.

As plenty of netizens have pointed out, Huawei is rather fond of blowing its own trumpet too. “Huawei is an incredibly powerful company and its R&D is very impressive,” reckoned one. “But its ability to brag is the most impressive of all.”

Richard Yu Chengdong unveiled the Kirin 980 microchip in Berlin on August 31. “We’ve designed an all-round powerhouse,” the CEO of Huawei’s consumer business declared.

Huawei claims a long list of world firsts for the Kirin 980, which will be manufactured by Taiwan Semiconductor Manufacturing Company (TSMC). It has 6.9 billion transistors packed onto a chip the size of a thumbnail: 1.6 times as many as its Kirin 970 chip. And it will be the first chip to use two neural processors (NPUs), which should support more functionality for applications in artificial intelligence. Its two NPUs will be able to recognise 4,500 images a minute, compared to 2,371 for Qualcomm’s Snapdragon 845 chip and 1,450 for Apple’s A11 Bionic.

It will also be the first chip to deploy ARM’s Cortex-A76 CPUs. This will result in faster processing speeds, Huawei believes.

And then there is the 5G functionality. The Kirin 980’s modem can hit speeds of 1.4Gbps (gigabytes per second), more than 50% better than the Snapdragon’s 866Mbps.

The smartphone sectors generally relies on the 10nm format but Huawei says its new chip will be 40% more energy efficient than its predecessor, delivering 20% better performance. Some of the claims were very specific: delivering “75% more powerful” in CPUs, for instance, and “46% greater graphics processing.”

Quite an achievement if that turns out to be correct, with Venturebeat concluding that “Huawei has Qualcomm firmly in its crosshairs.”

Could the news mean that the Chinese have taken another step in breaking the five-decade stranglehold of American companies on chipmaking too?

Critics have denigrated China’s semiconductor industry as backward. But the Huawei announcement implies a breakthrough in higher-end production. In a report published this week the global industry association SEMI comes to the same conclusion that Chinese capabilities are improving. It attributes this to the government’s Rmb140 billion ($21.5 billion) National IC Fund, which has been making massive investments in the local supply chain and it highlighted how chip design has ranked as the largest sub-sector of China’s semiconductor sector for two years in a row, supplanting the long-dominant IC packaging and testing business.

During 2017, China recorded $31.9 billion in revenues thanks to IC (integrated circuit) design but SEMI is forecasting that the next breakthroughs will be concentrated in chip manufacturing (foundries). It believes China will claim the top spot by 2020, helped by the 25 new foundries that are planned or under construction.

As we reported in WiC420, the Chinese government has been trying to downplay its ambitions for sectors like chipmaking, concerned that triumphalist talk is provoking other governments. It has banned the state media from mentioning the previously touted Made in China 2025 plan, for instance.

But the same mantra didn’t seem to matter much to Huawei’s fans in China, who celebrated its newly-launched microchip.

“I’m very proud of the company,” wrote one.

“I continue to support Huawei,” proclaimed another, before throwing in “let’s boycott the US and Japan” for good measure.

A third netizen took a less confrontational view: “No matter whether Apple, Qualcomm or Huawei is better, I’m glad to see that my country is moving forwards.”

Research from HSBC highlights just how far China’s leading brands have already advanced. The study points out that back in 2010, smartphone vendors like Huawei hardly featured in the rankings. By the end of last year they accounted for 24% of global sales and in the second quarter of 2018, Huawei overtook Apple for the first time, accounting for 15.5% of global sales compared to Apple’s 11.8%.

Samsung held onto its global lead on smartphone share, with 22% of the market.

HSBC also argues that Huawei and its compatriots are running into new opposition in developed markets (especially in providing networking and data services to national carriers) so they will have to focus more of their attention on merging countries.

For example, in late August the Australian government effectively blocked Huawei and ZTE from taking part in its 5G rollout on national security grounds.

A few days later, Sankei Shimbun reported that the Japanese authorities are considering similar action for its own 5G rollout.

Huawei responded by describing the Australian decision as “politically motivated”. But perhaps the same psychology could be ascribed to its own government, which effectively blocked Qualcomm’s $44 billion merger with NXP by withholding approvals on the deal (which collapsed at the end of July).

HSBC analysts still think that China will climb to the top of the tech tree, given how quickly income levels are rising across the developing world. Its report says the country’s manufacturers also have an “intuitive understanding of emerging market countries” which helps them to better tap local consumers.

Of course, the US tech titans will defend their turf fiercely and they boast millions of supporters inside Huawei’s home market. Plenty of netizens continue to express their admiration for Apple and others point out that Qualcomm will launch its next Snapdragon 855 chip by the end of the year.

Fans of Apple say that its forthcoming A12 Bionic chip will surpass Huawei’s Kirin 980 in terms of its functionality. It will also be available to consumers before the new Huawei chip (in the iPhone 9, which is likely to go on sale in late September).

Products with Huawei’s Kirin 980 are unlikely to go on sale until the following month in the company’s forthcoming Honor Magic 2 or Mate 20 smartphones.

Huawei has come in for criticism from some tech commentators, who say that the way it tests the performance of its smartphones doesn’t replicate into everyday usage.

Forbes magazine also took a dimmer view of Huawei’s prospects as a product pioneer, arguing that unless the Chinese firm “decides to leave Android behind” it will struggle to compete with Apple in terms of “hardware-software synergy”.

And then there is TSMC, which will make 7nm chips for both Apple and Huawei. The Taiwanese company’s presence in the manufacturing of the smallest nodes is commanding and analysts forecast that it will control 95% of 7nm output after GlobalFoundries dropped its own plans for production, citing cost considerations. That leaves only Samsung Electronics in the running, as UMC has decided to concentrate on maturer nodes, and SMIC is still grappling with 14nm output.

Another warning on 7nm technology is that it won’t pay off for a while, at least until 5G is embraced by more of the world’s smartphone users. Hence companies like Qualcomm and MediaTek are said to have delayed the launch of their own 7nm formats because they aren’t convinced that that can claw back the additional costs.

Money isn’t an issue Huawei seems too worried about: it spent $300 million developing its Kirin 980 processor.


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