Huawei backs Chinese suppliers to build advanced chipmaking tools

In short: Huawei is helping coordinate and fund Chinese companies to build the tools needed to make advanced computer chips at home.

What's going on

China still depends heavily on foreign machines to make advanced chips, especially lithography machines. Lithography is like using a very precise stencil and light to “print” tiny circuit patterns onto silicon.

The Financial Times reports that Huawei is investing across the supply chain for deep ultraviolet, or DUV, lithography machines. DUV is a type of chipmaking tool that uses strong ultraviolet light. It is not the most advanced type in the world, but it can still help make modern chips, especially with extra steps.

A key effort involves Yuliangsheng, a Shanghai-based equipment maker that has co-developed what people familiar with the work call the first Chinese-made advanced DUV machine. The machine is being tested by Chinese chipmakers including SMIC, and on Huawei’s own production lines, according to the report. One person familiar with the matter said Yuliangsheng aims to produce 12 DUV machines by the end of this year.

The hardest parts to replace are certain lenses and the high-powered light source. The report says Yuliangsheng uses projection lenses made by Germany’s Zeiss, and that some lenses may be obtained through secondary markets. Huawei-backed funds have also invested in Chinese suppliers working on local alternatives, including Fujian Zhiqi Photonics for optics and Beijing RSLaser Opto-Electronics for light sources.

What to watch

Testing and tuning these machines can take years, and Chinese factories still rely on ASML equipment today. Export controls that limit sales of the most advanced foreign tools to China may push Chinese chipmakers to work more closely with local suppliers, which could speed up progress.

Source: Financial Times