On 29 August 2023, Huawei announced its latest smartphone series, the Huawei Mate 60 and Mate 60 Pro. The phone itself is nothing fanciful, but the components which made up the phone shocked the world. Huawei and China’s top chipmaker Semiconductor Manufacturing International Corp (SMIC) has successfully built the 7-nanometre processor to power its smartphone.
Brief Technological Background
The semiconductor industry is a very important one, with applications in a wide range of technological products, from the PCs to the medical devices, from electric cars to military. To put it in very simple terms, anything electronic requires the use of a semiconductor chip.
CPUs are made of millions of transistors in a semiconductor chip. The distance between them, in nanometers, will determine how many transistors will be packed in the semiconductor chip. A smaller nm will mean lesser distance travelled by the electrons, resulting in lesser energy consumption, faster computing power, smaller die size, lesser heat dissipation, and lesser thermal output around the board. In short, the smaller the distance, the greater the efficiency and effectiveness, which directly affects the performance of the very electronic production the chip is in.
The 7nm technology is not new, with TSMC beginning production in 2016 and Samsung in 2018. However, just like nuclear technology, just because the technology is around does not mean everyone has it. And China did not have it till recently.
Brief Political Background
In late 2018, Canada had detained Meng Wanzhou, the daughter of Huawei’s founder and CEO for over 1000 days before releasing her in 24 September 2021. In 2019, the US launched an offensive on Huawei by banning companies from selling equipment and software to Huawei and restricted international chipmakers using US-made technology from partnering with Huawei. Huawei’s smartphone essentially disappeared from the Western world where Google is needed to power up the android phones. Subsequently the Chip 4 alliance was formed to further clamp down on China’s semiconductor industry.
Their intention was clear: to choke out Huawei before it got strong enough to compete with their best companies. China cannot be allowed to own the technology required to scale up the technology tree. In its desperation China had attempted to take down TSMC, which prompted the company to run to the US instead.
The detaining of Meng Wanzhou is essentially holding a political hostage to scare Huawei into backing out. Huawei and China while on the surface did what they could by condemning the act and sending lawyers which they knew would be futile, did not back out from attempting to climb up the technology tree. Although this whole saga was marketed by the Chinese as Huawei bravely forging on despite unreasonable and detestable actions by the West, and hence using the opportunity to trigger a wave of nationalism, the actual fact was that between a country and a person, it is clear who should be sacrificed. When a company is big enough, its own business is no longer its own affairs but tied to the domestic or even international politics. No man or woman can be bigger than a country, especially one with more than a billion lives at stake.
A wave of anti-Huawei’s 5G sentiments also made the headlines for sometime as the West further attempted to cripple their business along with their R&D (lesser money from businesses and no supply of critcal R&D resources) after seeing success on drawing blood from Huawei’s smartphone market.
Current Context
That is why the world, and especially the US is extremely shocked that despite all the pressures and chokehold, that China finally obtained the 7nm technology. With the 7nm technology, China is now self-reliant on 90% of its chip requirements. This effectively gives China much more breathing space and more leeway to progress. While China has still a lot more catch-up to do to reach TSMC’s and Samsung’s current 5nm, who are now aiming for 3nm, we can expect the West to be stronger in their following clampdown. On the other hand, the US commerce side will now have a big headache as they can effectively lose up to 90% of China’s market. What started as an attempt to force China to cripple and be reliant on them now see themselves potentially losing a big market.
There are many predictions floating online about what will happen in the near future. From a stronger clampdown to prevent China from advancing further to China now being able to quickly progress in their current technology in other areas (such as telecommunications), many people are either excited or worried, depending on where you stand. As there are many articles out there, I will not go along that line.
But one thing for sure, is that China has made another leap forward. Though I do not impact anything, do I support China’s climb up the technology tree? Yes, but not because I like them a lot. But simply because it is no good for the US to continue be the undisputable leader in all areas without challenge. Despite mankind’s technological progress, history has always repeated itself in an endless cycle because the nature of men has never changed. As one gains power over prolonged periods of time, one will inevitably turn evil and abuse his power. This applies not only to humans, but to countries which are made up of individual humans too. Then there will be another challenger to take down the corrupt power.
The US has been proven time and again to be corrupt and criminal beyond reason. I do not support China because I like China, but because to those of us in other countries, the emergence of a second power balancing out the first will generally be beneficial for all other countries, provided that they do not go to war. In terms of our daily living, we will soon get back another smartphone offering as Huawei restarted its phone manufacturing business again. Consumers have choices. On the global stage, with someone counter-acting the biggest boss, perhaps we are able to see more opportunities of peaceful living, rather than blatant exploitation and war all over the world.
Conclusion
There are those who are able to read the global situation very well and sniff business and investment opportunities from afar. Likewise there are sure to be opportunities with this news. However I am unable to confidently recommend any opportunities at this moment despite having a few ideas myself, so I will not say it out here. Though most of us have no part in contributing to China’s success today and will not be able to impact anything, we can learn a lesson or two from their success.
In the next article, I will talk about the Chinese, and by extension, the Asian system that gets China to where it is today and how we can learn from it.
