Last year, Huawei’s smartphone sales increased significantly, mainly due to the popularity of the Mate 60 series with the Kirin 9000S chip. Built on the 7nm process, the 9000S is not the most efficient SoC for smartphones, but its development is a remarkable achievement for Huawei.

However, the company now needs a more powerful and efficient chip for future smartphone models. A report from the Financial Times reveals that Huawei is now aiming to produce 5nm chips. Its partner SMIC, China’s largest chipmaker, has built a new semiconductor line in Shanghai to produce chips designed specifically by Huawei.

The move comes after the Biden administration imposed tighter export restrictions on advanced chip manufacturing equipment, citing national security concerns.

The US government is also working with the Netherlands and Japan to make it more difficult for China to access advanced chip manufacturing equipment. SMIC is currently said to be redesigning existing DUV equipment to produce 5nm chips. However, this approach may lead to lower efficiency and higher SoC cost.

It’s also important to note that while Huawei’s 5nm chip certainly won’t be able to compete with flagship chipsets from Qualcomm or MediaTek, China’s semiconductor industry is still advancing despite the US ban.

Therefore, producing 5nm chips without the need for external support will be a great success for both Huawei and SMIC. “With its new 5nm node, Huawei is on track to upgrade its new flagship phone and data center chips,” a person familiar with the plans told the Financial Times.

It is said that Huawei will use the upcoming Kirin SoC in the P70 series smartphones. In addition, the company is actively working on the new generation operating system Harmony OS NEXT, built on Huawei’s proprietary core. The operating system will also completely drop support for Android apps.