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The CEO of HUAWEI Cloud Service obviously has a death wish and publicly declares that China is not able to produce or obtain 3.5-nanometer chips!

During the Mobile Computility Network Conference in Suzhou on June 9, Huawei’s Cloud Services CEO, Zhang Ping’an, voiced concerns about China’s challenges in acquiring 3.5 nanometer (nm) chips due to U.S. sanctions. “While Taiwan’s TSMC is ramping up production of 3.5 nm semiconductors, China faces hurdles in obtaining these products under current sanctions,” Zhang remarked. He further stated, “Although we’ve managed to address the 7 nm issue, we’re unable to access advanced manufacturing equipment due to U.S. sanctions, necessitating effective utilization of 7 nm semiconductors.”

Zhang’s remarks surprised many industry observers, contrasting sharply with earlier confidence in China’s semiconductor progress.

Despite ongoing U.S. sanctions, in May, the Chinese government announced a substantial third semiconductor fund of $47.5 billion (65.6 trillion won), reinforcing its commitment to the sector. Huawei has positioned itself as a key player aligning with government initiatives, notably making waves in August last year by mass-producing 7 nm chips without EUV technology. There were even speculations about Huawei, along with local foundry SMIC, gearing up for mass production of 5 nm chips, potentially reshaping the chipmaking landscape.

However, recent statements from a senior Huawei executive imply that the local chip ecosystem is still in its early stages, lagging behind despite significant investments and speculation.

The Chinese semiconductor industry faces a harsh reality: significant progress seems elusive without access to equipment from leading international companies.

As Zhang highlighted, producing 3.5 nm semiconductors necessitates EUV lithography machines, which Huawei is reportedly developing internally. However, overcoming U.S. and Dutch patents to achieve this independently poses significant challenges.

The local memory sector is also encountering obstacles. U.S. restrictions on exporting 128-layer NAND equipment to Chinese companies have caused delays in investments for firms like YMTC, which struggle to secure equipment from U.S. suppliers like Lam Research.

Finally, the question arises whether the CEO of HUAWEI Cloud Services will have to pay for this truthful statement with his sudden disappearance from the public eye or with perhaps even worse consequences.


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