In China, questions remain ahead of Huawei’s launch of the Mate 60 phone series

US Commerce Secretary Gina Raimondo became Mate 60 spokesperson on Chinese social media to suggest that U.S. suppression has helped China's technology breakthroughs. Screenshot from a viral Tiktok video via X user Carl Zha.

Huawei, a controversial Chinese tech corporation accused of cybersecurity and intellectual property violations, will launch its new mobile phone, the Mate 60 series, on September 25, 2023.

Ahead of the official launch, the tech company flooded major social media platforms, including X (formerly Twitter), with corporate advertisements under hashtags such as #LeadingByaLongShot” (遙遙領先). The Mate 60 has been on presale since August 29, 2023.

As the publicity campaign stressed that the smartphone, equipped with a homemade chip (Kirin 9000), is evidence that China has overcome the U.S. sanctions through technological breakthroughs, many commentaries questioning the effectiveness of the U.S. sanction policy emerged.

The U.S. government has implemented restrictions on selling semiconductors to China since 2018 amid the U.S.-China trade war. At first, the sanctions only banned U.S. chip manufacturers from selling to targeted Chinese corporations, namely ZTE and Huawei, which allegedly violated U.S. sanctions against North Korea and Iran and other offences. Later, it required all chip manufacturers that use U.S. technology in their production to comply with the U.S. export restrictions, resulting in a global ban on the sale of advanced chips to China.

Hence, soon after the launch of Mate 60, the tech community examined the “technological breakthroughs” of China’s homegrown chips and concluded that the chips were manufactured through old technology. The findings have raised more questions about Huawei’s smartphone business.

China’s story: Overcoming U.S. suppression

Huawei’s Mate 6 publicity campaign has been supported by state-owned media outlets such as the Global Times and many social media influencers. The following viral cartoon, depicting Huawei as a fighter who has beaten major U.S. tech giants and been bullied by the U.S. government, was shared by pro-China social media influencer Carl Zha, China state-funded CGTN editor Shen Shiwei, and China’s Consul General in Belfast Zhang Meifang, among others.

The message is spelt out more directly by the state-funded Global Times:

In addition to the above political message, many viral videos show off the smartphone’s impressive functions, such as making satellite calls, coming equipped with a fully waterproof shell, and camera zooming:

And it can even be used as a nutcracker:

All these featured were referenced to prove that Huawei is “leading by a long shot” compared to its peers.

How did Huawei manufacture a 7nm chip amid U.S. sanctions?

While all these functions are truly amazing, the more critical question is how Huawei managed to manufacture the Kirin 9000 7nm chip amid U.S. sanctions.

Thus far, only three chipmakers around the world, the Taiwanese Semiconductor manufacturing company (TSMC), Samsung and Intel, are capable of producing 7nm chips using Extreme Ultraviolet (EUV) lithography machines — the most advanced technology for producing sophisticated chips smaller than 7nm. The technology is included in the U.S. export ban against China.

To prove that the Kirin 9000 chip is indeed homegrown, Huawei requested a consulting firm, Techinsights, to break down and review its smartphone. The tech team discovered Mate 60 has a Kirin chip using “SMIC’s 7nm (N+2) foundry process”, which means China has made a 7nm chip without EUV lithography tools.

SMIC reportedly used multiple rounds of Deep Ultraviolet lithography (DUV) to print sophisticated patterns on the tiny chip and bypass the use of an EUV lithography machine. Taiwanese semiconductor manufacturer TSMC used a similar technique back in 2019 to print the first few layers of a 7nm chip. However, the Taiwanese manufacturing process still required EUV lithography to finish up the product. TSMC shifted to EUV lithography as the yield of the DUV lithography for producing 7nm chips was too low, and the costs ran high.

SMIC did not reveal the yield of its N+2 process, but earlier reports stated that its yield of the N+1 process was around 50 percent. This implies that the cost of the chip inside the Mate 60 would be many times higher than that of other smartphone brands.

As reflected in SMIC’s 2023 second-quarter financial report, its “profit from operation” was 85.2 percent less than last year — signally that the expensive new process may not be good news for the company's bottom line and its shareholders.

How did chips from South Korea end up in Huawei’s Mate 60?

Techinsights’ review also found South Korean semiconductor company SK Hynix’s memory (DRAM LPDDR5) and flash storage chips (NAND) in Mate 60.

The Korean company denied any business ties with Huawei after the U.S. government blacklisted the Chinese tech giant in May 2019. This begs the question: how did the South Korean chips end up in China’s homemade smartphone?

A simple answer is either Huawei had stockpiled SK Hynix’s chips before the export restrictions, or it managed to import the chips via a third party, as suggested by Anders Corr, a political news analyst:

Has the U.S. government's ban on chip sales to China failed?

Although both pro-China influencers like CCTV documentary host Mario Cavolo and U.S. right-wing commentators like Republican Senator Marco Rubio criticised U.S. President Joe Biden’s government for its failure to sanction China, there are no signs that the U.S. will soften its tech war against China.

Earlier in July, a semiconductor trade group started lobbying the U.S. government against imposing more restrictions on chip sales to China as it would run the risk of “disrupting supply chains, causing significant market uncertainty, and prompting continued escalatory retaliation by China.”

However, on August 30, just one day after Huawei announced the presale of its new phone, the U.S. government curbed exports of artificial intelligence chips beyond China to some countries in the Middle East to prevent third-party chip smuggling. In addition, during the G20 Summit, Biden signed partner agreements with the India and Vietnam governments on developing semiconductor industries to address the potential disruption of the global supply chains.

iPhone's biggest manufacturer, Foxconn, is following the U.S. government’s lead in shifting away from China:

More ironically, Huawei’s publicity campaign was used by U.S. Republican lawmakers to call for “full blocking sanctions” on Huawei and SMIC, as pointed out by tech analyst Jordan Schneider:

Will the Apple iPhone lose its China market?

One week after the presale of Mate 60 and days ahead of the launch of Apple’s latest iPhone 15, China announced a ban on the smartphone for government employees, citing a digital espionage threat. Some commentaries warned that Apple would become a casualty of the U.S.-China tech war.

Indeed, China is an important market for Apple products:

But punishing Apple will also hurt China’s own economy. According to a business analyst, about 90 percent of Apple products were manufactured by Chinese contractors, and about 70 percent of its manufacturing sites were in China in 2022. Given the economic downturn and the unemployment problem, if Apple pivots its supply chain to India, China will also suffer.

Despite the nationalistic sentiment surrounding the launch of Mate 60 and the Chinese government’s security warning, Chinese users’ enthusiasm for Apple products has not cooled off.

Are there any negative comments about Mate 60?

The overblown promotion of Mate 60, followed by an investigation of the technology behind China’s “technological breakthrough”, has ironically resulted in a backlash outside of China. Tech communities from both South Korea and Taiwan claimed that the CEO of SMIC, Liang Mong Song stole the “N+1” technique from their own tech giants:

Negative comments about the smartphone have emerged on social media.

One viral video shows a Mate 60 user's RMB 1,000 (approximately USD 130) credit gone within seconds when he used the satellite call function.

A censored report (backed up by China Digital Times) conducted by a digital security company in mainland China shows that the security software used by mainland Chinese law enforcement could retrieve data from more than 300 apps, including Telegram, X, WeChat, TikTok, etc. from Mate 60s in just three steps.

Internet users joked that Huawei is definitely “leading by a long shot” in surveillance technology as Mate 60's camera is always ready to detect nearby objects, as shown in the following viral video: the auto payment function of Mate 60 is triggered by the camera visual detection rather than radio frequency identification:

On September 10, a media outlet uploaded a video claiming that Huawei’s Mate 60 could automatically retrieve the user’s payment code when the phone was placed near the scanner. And asserted that Huawei’s technology was “leading by a long shot”. An internet user first assumed that the technology was similar to Radio Frequency Identification (RFID). However, another user managed to use a photo of a scanner to retrieve the payment code and proved that Mate 60’s camera was always on. And once it detected a shape that looked like a scanner, it would retrieve the code.

There are also allegations that negative comments about Mate 60 on Chinese social media platforms were hidden. In one case, the user's Xiaohongshu account was suspended for one month after he said the smartphone was overheating.

What is behind the timing of the launch of Mate 60?

Huawei originally scheduled the launching of Mate 60 on September 25, the second anniversary of its CFO Meng Wanzhou’s return to China from Canada, where she was caught in an extradition trial to the U.S. over bank and wire fraud.

The announcement of the presale of Mate 60 on August 29 caught many by surprise. As it took place soon after U.S. Commerce Secretary Gina Raimondo rounded off her visit to Beijing, there was speculation that the publicity campaign was a symbolic protest against the U.S.'s policies against China. In fact, Raimondo was turned into a Mate 60 spokesperson on Chinese social media:

Others believe that the presale is to get ahead of Apple's launch of iPhone 15 on September 12.

The timing of its official launch is also close to October 1, the 74th anniversary of the founding of the People's Republic of China, a time for the online parade of nationalism.

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