China’s Hua Hong Group has developed advanced chip manufacturing technology that can be used to produce AI chips, four people familiar with the matter said, a major milestone in Beijing’s efforts to boost tech self-sufficiency.
The group’s contract chipmaking business, Huali Microelectronics, is readying a 7-nanometre chipmaking process at its plant in Shanghai, the people said. That would make it the second Chinese chipmaker with such advanced technology. Hua Hong is China’s second-largest chipmaker. Huawei Technologies Ltd. has been in collaboration with the chipmaker for the 7 nm AI chip, the sources said.
China’s largest contract chipmaker, Semiconductor Manufacturing International Corporation or SMIC, is at present the only domestic producer capable of making chips with 7 nm technologies.
SMIC uses Dutch chip equipment maker ASML’s immersion machines to make 7 nm chips, but production yields — the number of good chips made per silicon wafer — have remained weak, analysts have said.
China Semicon Overdrive
The development comes after Washington eased some of its tech export controls since last year, allowing Nvidia Corp. to sell its second-most-powerful AI chips to China. Despite the easing, Beijing has encouraged domestic firms to purchase homegrown alternatives, as it seeks to wean itself off foreign suppliers.
Reuters could not determine how Hua Hong achieved advanced manufacturing capability, its manufacturing efficiency and which equipment suppliers were involved in the development. Hua Hong’s development of a 7 nm chipmaking process has not been previously reported.
All of the people cited above declined to be named, because the information is not meant to be public. Hua Hong Group, Huali, Hua Hong Semiconductor and Huawei did not respond to requests for comment.
ASML said it does not comment on questions related to deliveries.
Chip R&D underway in China
Huali’s R&D on 7 nm chips at its Hua Hong Fab 6 began last year, with support from domestic equipment suppliers including Huawei-backed SiCarrier, which tested its equipment at a facility in Shenzhen last year, a separate source said. SiCarrier did not respond to a request for comment.
The development followed an announcement by Hua Hong Semiconductor in December that it planned to acquire a controlling stake in Huali and raise a further 7.56 billion yuan ($1.10 billion) to fund technological upgrades and research at the foundry.
Huali is planning initial 7 nm chip production capacity of a few thousand wafers per month by the end of the year, with a goal to ramp up more later, two of the sources said.
Chinese GPU designer Biren is using Huali’s 7 nm line for tapeout — a process in which a chip design is committed to a physical prototype for testing before mass production begins, one of the sources said.
Placed on a US trade blacklist in 2023, Biren lost access to TSMC’s contract manufacturing service shortly after. Biren did not respond to requests for comment.
The Hua Hong Fab 6 is the most advanced of seven foundries within the Hua Hong Group and currently manufactures logic chips using 22 nm and 28 nm process nodes, according to the company’s website. By contrast, its Fab 5 produces chips using mature technologies ranging from 40 nm to 55 nm.