Huawei Technologies announced on Monday that it expects to produce industry-leading semiconductors within five years using new technology, highlighting Beijing's drive to overcome U.S. sanctions that have hampered China's ability to develop advanced chips.
Huawei, in a semiconductor symposium in Shanghai, said its high-end chips will have transistor density equivalent to 1.4-nanometre processes by 2031, but did not provide independent performance data.
The target is significant as China's most advanced proven chipmaking capability is widely seen at around 7 nanometres, while 1.4 nm is expected to be close to the global frontier for advanced chipmaking around the end of the decade.
China is generally viewed as unlikely to reach that level through conventional manufacturing alone because Washington has restricted its access to advanced lithography tools and other key semiconductor technologies.
Taiwan's TSMC, the world's largest producer of the most advanced chips, currently uses a 2-nm manufacturing technology and plans to introduce a 1.4-nm process for mass production in 2028.
Huawei unveiled on Monday a new principle for improving chips, noting the industry can no longer rely on shrinking transistors for computing breakthroughs, a pattern known as Moore's Law, as they have become so small that their dimensions are measured in only a few atoms.
The Tau Scaling Law, as the principle is called, instead focuses on cutting the time it takes signals and data to move through chips and computing systems, Huawei said.
While the global chip industry is increasingly investing in post-Moore's Law solutions, from advanced packaging to chiplets, the search has become especially urgent for China.
U.S. export controls have restricted Chinese companies' access to the most advanced chipmaking tools, particularly the equipment needed to make chips at leading-edge process nodes.
That has made alternative routes to higher performance central to Beijing's goal of building a world-leading and self-sufficient semiconductor industry.
"What Huawei is proposing is a shift from traditional node-driven scaling to system-level efficiency scaling," said He Hui, director of semiconductor research at Omdia.
"Rather than depending solely on smaller transistors, the company is focusing on shortening interconnect, lowering latency and improving data movement inside the chip, which is a credible way to extract more performance when leading-edge lithography is constrained."
The stakes of Huawei's chip breakthroughs are doubly high, as frontier technologies have become an increasingly important pillar of future economic development and geopolitical leverage for China.
Huawei's Ascend chip series is central to powering Chinese AI models, including DeepSeek's latest flagship model V4, released last month.
Huawei said its Kirin smartphone chips scheduled to launch later this year would be the first to use a Tau Scaling architecture called LogicFolding, which the company said would shorten wiring inside chips and considerably improve performance.
LogicFolding will also be applied to Ascend chips by 2030, as well as large AI clusters made up of hundreds or thousands of chips that power data centers, the company said.
It added that its chip division has designed and mass-produced 381 chips over the past six years based on Tau Scaling Law for use in industries including smartphones and AI computing.
Huawei was placed on a U.S. trade blacklist in 2019 that cut it off from many U.S.-origin technologies, including chips and software, and restricted its ability to rely on global contract chipmakers.
Huawei entered what it described as an "extreme survival mode" after the restrictions were imposed. A secret backup chip project led by He Tingbo, president of Huawei's semiconductor business and director of its Scientist Committee, became central to its survival strategy.
The company mounted a surprise comeback in 2023 with the launch of its 5G-capable Mate 60 series smartphones, powered by a system-on-chip produced by China's biggest contract chipmaker, Semiconductor Manufacturing International Corp. (SMIC), using 7-nm technology.
SMIC shares rose 7.6% on Monday after Huawei's announcement of its LogicFolding architecture. SMIC has also recently invested in post-Moore's Law pathways, setting up an advanced packaging research institute in Shanghai in January.
Demand for Ascend chips has risen in China this year, as domestic tech firms seek alternatives to the U.S. company Nvidia, whose most advanced AI processors are restricted from sale to China.
Nvidia CEO Jensen Huang said earlier this month that the company had "largely conceded" China's AI chip market to Huawei.
While acknowledging progress, analysts say China remains behind global leaders in the most advanced process technology.
"Cost, power, heat, and system integration remain major challenges, especially for Cloud AI servers," said Brady Wang, associate director at Counterpoint Research.
"In the short term, China may narrow the gap with global leaders, but a technology gap with the most advanced nodes will still remain," he added.
Huawei's chip head He acknowledged that its latest approach still faces major hurdles, including the need for new chip-design tools suited to Tau Scaling and the challenge of preventing overheating, from mobile chips to large AI data centers.
"Given all the various constraints, we have found some pretty good solutions... I can confidently say in the coming 10 years our solutions for mobile computing and AI computing will be competitive," said He.
