Huawei’s HiSilicon Conference Sparks Speculation of Breakthrough Amid US Sanctions

Huawei’s HiSilicon Conference Sparks Speculation of Breakthrough Amid US Sanctions

Huawei Technologies' upcoming conference, organized by its discreet chip design unit HiSilicon, has sparked significant speculation about potential breakthroughs, leading to a surge in China-listed tech stocks. Scheduled for September 9-10 in Shenzhen, the HiSilicon Connect Conference is expected to reveal Huawei's progress in chip design and possibly the formation of a Huawei-centered ecosystem, despite ongoing US sanctions.

Market Reactions and Investor Caution

The anticipation surrounding the conference has led to a sharp rise in stock prices for companies associated with HiSilicon. Shenzhen Huaqiang, a distributor of HiSilicon products, saw its stock surge by the daily limit of 10% on multiple days, prompting the company to caution investors about the "uncertainties" regarding HiSilicon's new product launch. Similarly, Huizhong Instrumentation, which uses HiSilicon chips in some of its products, experienced a 40% increase in stock value over two days before issuing a statement that led to a 19% drop.

Huawei’s Silent Progress in Semiconductor Development

Huawei has been notably silent about its advancements in semiconductor technology, particularly following the launch of its 5G-capable Mate 60 series smartphones last year, powered by the HiSilicon Kirin 9000s. Despite the lack of public statements, teardown reports suggest that Huawei's latest Pura 70 series smartphones also utilize chips made with the same 7-nanometer process as the Mate 60 series. This has kept the tech world closely monitoring Huawei's developments, as the company strives to overcome the challenges imposed by US sanctions.

HiSilicon’s Struggles and Potential Comeback

HiSilicon's journey has been challenging since being added to the US trade blacklist in 2019, which significantly restricted its ability to manufacture chips through major foundries like Taiwan Semiconductor Manufacturing Company (TSMC). Before these sanctions, HiSilicon was on track to develop competitive processor chips for smartphones and networking products, rivalling those of US giants like Intel and Qualcomm. However, its global market share plummeted from 16% in 2020 to zero in 2022, marking a significant setback in its ambitions.

The Future of HiSilicon and Huawei’s Semiconductor Aspirations

As the HiSilicon Connect Conference approaches, industry observers are keen to see whether Huawei will announce a significant breakthrough in its chip design capabilities. The company's efforts to become independent from US technology have been driven by national security concerns, with Washington imposing sanctions to prevent China's advancements in semiconductors and artificial intelligence from being used to modernize its military. The conference could provide a rare glimpse into Huawei's strategies and its progress in overcoming these formidable challenges.