Semiconductors from Xiaomi The first 3-nm chip "made in China"?

Related Vendors

Asia Waypoint

FAULHABER Drive Systems

Wuxi InfiMotion Technology Co., Ltd.

Reports about the new chip are keeping China on edge. The mobile phone manufacturer Xiaomi, which has recently also started building electric cars, is said to have designed its own semiconductor in the 3-nanometer class. This would be a tremendous success, a milestone for the entire chip industry of the country. However, it could also put Xiaomi in the sights of Americans, which is why the company prefers to remain silent about the reports.

It was a scoop by Beijing television station BRTV. On October 20, they broadcast an interview with Tang Jianguo, the chief economist at the Beijing Municipal Bureau of Economy and Information Technology, responsible for the high-tech industry in the increasingly active capital city of China.

Xiaomi has successfully designed a 3-nm SoC. The "tape out," after which the final design can be sent to the manufacturer, has already occurred, according to the official. The news spread like wildfire among industry professionals. With this achievement, the Chinese have almost caught up with the world's most successful chip manufacturers like Samsung, Intel, or TSMC at least on the design level.

However, the video containing the interview quickly disappeared from the internet. It was removed from the broadcaster's website. News about technological breakthroughs in the Chinese semiconductor industry is highly sensitive, especially since the USA has waged a technology and trade war against China focusing on semiconductors and future technologies such as artificial intelligence. Washington justifies this with the "dual use" argument, stating that such chips can also be used for military purposes.

Trade dispute between the USA and China

USA plans to ban Chinese software and hardware in connected vehicles

Not yet on the blacklist

Unlike Huawei, the Chinese technology conglomerate and telecom equipment supplier, the smartphone manufacturer Xiaomi is currently not on the blacklist of the US Department of Commerce, thus still has access to chips from the USA. In its mobile phones and other electronics, Xiaomi incorporates both imported semiconductors and those developed in-house by its own chip division, as well as chips produced within China.

In this case, access to EDA (Electronic Design Automation) software from the USA is even more crucial for Xiaomi. American companies like Cadence Design Systems, Synopsys, and Mentor Graphics, a Siemens subsidiary operating in the USA, hold an almost total global monopoly on advanced software for chip design. Following media reports about the new chip, Xiaomi may now fear being scrutinized more closely by trade warriors in Washington due to its design breakthrough. Consequently, the proud official's television interview may have inadvertently caused significant complications for the company.

Strategic bottleneck

This episode highlights how Washington attempts to curb the Chinese semiconductor industry. While reports often focus on the export bans of advanced AI chips, such as Nvidia's GPUs, in reality, it is not just one area but four strategic areas or "choke points" where Washington tries to prevent the Chinese from building their own semiconductor industry. These efforts are significant in the broader context of international trade and technological dominance.

In addition to export bans on particularly powerful chips, Chinese companies are also denied the import of equipment for their manufacture, such as top-end lithography machines, access to various key components, and finally the use of advanced EDA software from the USA.

Thus, it is a broadly scoped strategy of economic warfare by the USA, more than the commonly used term "chip war" suggests. The aim is not only to target major tech conglomerates in the People's Republic that wish to use chips in mobile phones or data centers but also to cut off the entire Chinese semiconductor industry from modern high technology. According to American plans, China should neither be able to purchase nor manufacture such high-performance chips.

Self-made

Chinese companies like Huawei and now Xiaomi are countering by attempting to design their own high-performance chips. The last time a similarly politically sensitive news circulated, Huawei had designed an advanced semiconductor for its own 5G phone through its in-house chip division, HiSilicon. That was last year.

Should the current media reports about the Xiaomi chip prove true, this would be further evidence of the failure of American technology boycotts and a triumph for the communist state and party leadership in Beijing, which is driving its own industry toward independence from Western imports.

However, Xiaomi still needs to find a suitable foundry capable of manufacturing a 3-nm chip without a high rate of defects. It is speculated that this could be the Taiwanese contract manufacturer TSMC. However, Washington might still exert its influence there, as the Taiwanese also conduct business in North America and worldwide, and are sensitive to pressure from Washington. Lei Jun, the founder and CEO of Xiaomi, is aware of these difficulties. He has once said that chip design is a high-risk game. You can invest a huge amount and still end up with nothing. (sb)

Battery technology

CATL, BAIC and Xiaomi break ground for battery cell factory in Beijing

SiC Chips for China electric cars

The car is from Xiaomi, the SiC chips are from Infineon – but for how long?