Huawei Technologies has announced a strategic collaboration with Wuhan Xinxin Semiconductor Manufacturing Co. to advance the development of high-bandwidth memory (HBM) chips. These cutting-edge memory chips are integral to the computing infrastructure needed for artificial intelligence (AI) projects. The collaboration also includes mainland integrated circuit (IC) packaging firms Jiangsu Changjiang Electronics Tech and Tongfu Microelectronics, which will provide the advanced packaging technology known as Chip on Wafer on Substrate (CoWoS). This technology enables the stacking of different types of semiconductors, such as graphics processing units (GPUs) and HBM chips, in a single package.
Huawei’s engagement in the HBM chip market is part of its broader strategy to mitigate the impact of US-imposed tech sanctions. Last August, Huawei made headlines by re-entering the 5G smartphone market with a new handset featuring a 7-nanometer processor. This move garnered significant attention in China and sparked scrutiny from Washington, given the stringent tech access restrictions in place.
China is still in the nascent stages of HBM chip development, but the industry’s progress is being closely monitored by analysts and insiders, especially against the backdrop of US restrictions on semiconductors and AI technology. In May, Reuters reported that ChangXin Memory Technologies, China’s premier dynamic random access memory (DRAM) manufacturer, had developed sample HBM chips in collaboration with Tongfu Microelectronics. Additionally, an April report from the online tech publication The Information indicated that a consortium of Chinese firms, spearheaded by Huawei, aims to enhance domestic HBM chip production by 2026.
In March, Wuhan Xinxin issued a tender to construct an advanced facility dedicated to HBM chip production, aiming for an output of 3,000 12-inch wafers per month. Subsequently, in May, Wuhan Xinxin filed for an initial public offering (IPO) with the China Securities Regulatory Commission in Hubei province. As a subsidiary of Yangtze Memory Technologies Corp. (China’s leading flash memory chip manufacturer), Wuhan Xinxin increased its capitalization by 46 percent to 8.5 billion yuan (US$1.2 billion) through new investments from the state-backed China Internet Investment Fund.
Huawei has also garnered interest in its Ascend 910B chip as a viable alternative to Nvidia’s A100 GPU for AI development projects in China. However, Huawei’s foray into the HBM chip sector faces formidable competition from South Korea’s SK Hynix and Samsung Electronics, which currently dominate the global market. According to data from Taiwan IC research firm TrendForce, these two companies are expected to control about 50 percent of the market share each in 2024. Meanwhile, US memory chip maker Micron Technology holds a market share of 3 to 5 percent.
Major semiconductor design firms like Nvidia and Advanced Micro Devices (AMD), along with chip manufacturer Intel, have integrated HBM into their products, thereby driving global demand for these high-performance memory chips this year, as reported by TrendForce. Despite the increasing demand for HBM chips, China’s semiconductor supply chain is not yet equipped to fully capitalize on this market opportunity. Simon Woo, managing director and coordinator of Asia-Pacific Technology Research at Bank of America Securities, pointed out in a recent interview with the Post that China’s semiconductor supply chain still lacks the capacity for high-end memory fabrication, concentrating mainly on mid- to low-end solutions.
- Strategic Partnership: Huawei’s collaboration with Wuhan Xinxin, Jiangsu Changjiang Electronics Tech, and Tongfu Microelectronics to develop HBM chips.
- Advanced Packaging Technology: Utilization of Chip on Wafer on Substrate (CoWoS) technology for stacking GPUs and HBM chips.
- Market Response: Efforts to counteract US tech sanctions and boost China’s position in the HBM chip market.
- Capacity Building: Wuhan Xinxin’s plans to build a facility for producing 3,000 12-inch wafers per month.
- Global Competition: Huawei faces stiff competition from industry giants SK Hynix, Samsung Electronics, and Micron Technology.
| Company | Market Share (%) |
|---|---|
| SK Hynix | 50 |
| Samsung Electronics | 50 |
| Micron Technology | 3-5 |
The collaboration between Huawei Technologies and Wuhan Xinxin Semiconductor Manufacturing Co., along with other mainland IC packaging firms, marks a significant step in China’s quest to develop high-bandwidth memory (HBM) chips. These efforts are crucial for supporting the computing infrastructure required for AI projects and countering US-imposed tech sanctions. While China is still in the early stages of HBM chip development, the strategic partnerships and investments being made are set to enhance the country’s capabilities and market position in the global semiconductor industry.
Despite the challenges posed by established competitors like SK Hynix and Samsung Electronics, Huawei’s initiative underscores the importance of technological self-sufficiency and innovation. As the industry evolves, the success of these endeavors will be closely watched by analysts and insiders, given the significant implications for China’s semiconductor supply chain and broader technological ambitions.
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