Taiwan firms aiding Huawei chip fab plans – report

Huawei is getting some help from Taiwan companies in its efforts to build advanced chip fabs, according to Bloomberg.

Clean room designer L&K Engineering, manufacturing process company Topco Scientific, chemical systems supplier Cica Huntek Chemical and clean room design and construction company United Integrated Services are among those contracting to heavily-sanctioned Huawei, Bloomberg said. 

"[They are] relatively small companies but they have been relatively integral to building what is really the most powerful semiconductor industry in the world in Taiwan. And now they're helping Huawei," reporter Peter Elstrom told Bloomberg TV

The Taiwan companies have acknowledged they were working with Huawei, but claimed they were involved in non-core areas such as wastewater management and had not breached US sanctions. Taiwan authorities are investigating. 

The news comes weeks after Huawei released its first 5G phones, built via a workaround of Washington sanctions by using older, unsanctioned US technology. 

The new devices were hailed as a breakthrough by Chinese officials and analysts, although US Commerce Secretary Gina Raimondo told a congressional hearing there was no sign Huawei would be able to scale its new 5G production methods.

There's now some support for that view from tech market intelligence firm IDC.

Same market share 

Despite the claimed advance in chip manufacture and the support of the Taiwan firms, IDC doesn't see China is about to make any gains in the high-end chip segment any time soon.

It predicts China will have the same share of the high-end 7nm and under market in 2027 as in 2023, according to a research note issued this week. 

IDC expects Taiwan's share of that segment to slip from 80% to around 70%, tipping the US, surprisingly, to take an 11% share.

The research firm does see China growing its share of the overall market. Helen Chiang, IDC's Asia Pacific semiconductor research lead, said this would be not just because of the government's drive to build out semiconductor manufacture, but also because of the size of the China domestic market, the world's second largest.

She said local foundry players SMIC, HH and Nexchip were aggressive in developing 28nm, 40nm/45nm and 55nm/65nm technologies, which were in high demand in communication, consumer electronics and automotive sectors.

China's chip output in this range would increase 30% over the next four years, she said. 

Chiang acknowledged the US's widely reported problems in cost and talent for its new Arizona chip fab, but said these were always issues when setting up in a fresh location. She expected the proportion of local US staff would gradually increase and that talent and cost issues would also be solved over time. 

"Based on our understanding of the current capacity and plan of the key players who build fabs in the US, we believe the US share will grow by 2027."

She said the research showed geopolitical shifts were fundamentally changing the semiconductor game, with countries implementing long-term strategies focused on supply chain self-reliance, security and control. 

"The industry operation will move from global collaborations to multi-regional competitions," she said.

TSMC's new Arizona facility has delayed the start of commercial 4nm production until 2025 because of staffing issues. A second 3nm plant is due to start in 2026.