China's chip stocks rally following Huawei's quiet launch of Mate 60 Pro phone

Aron Chen

posted on August 30, 2023 9:05 pm

Chinese chip stocks rallied on Wednesday in response to Huawei Technologies' launch of the new Mate 60 Pro phone. Investors speculated that the device might incorporate a 5G capable chip, potentially marking a victory for China's domestic semiconductor industry.

Huawei's sudden release of the Mate 60 Pro smartphone drove massive stock market gains, with chip stocks such as China's Semiconductor Manufacturing International Corp, Maxic, are up nearly 10% for the day.  

During the unexpected launch of the Mate 60 Pro on Tuesday, Huawei declined to disclose specific information about the smartphone's processor or whether it supports 5G mobile networks.

According to tests conducted on the smartphone, Chinese benchmarking website AnTuTu identified the central processing unit (CPU) in the Mate 60 Pro as the Kirin 9000s, designed by Huawei's chip design unit HiSilicon. The CPU features a 12-core configuration and operates at a maximum clock speed of 2.62 gigahertz, as reported by AnTuTu on Wednesday.

Online users who purchased the phone started sharing videos of themselves conducting tests, claiming that these tests demonstrated the phone's capability to achieve network speeds similar to those of phones equipped with 5G chipsets. Additionally, they posted screenshots indicating that the phone is powered by a Kirin 9000s chip.

The phone's launch quickly became the most searched topic on Weibo, often referred to as China's equivalent of X (Twitter), on Wednesday. Excited users expressed that the launch symbolized the successful navigation of U.S. restrictions, reflecting a sense of achievement and overcoming challenges.

In a statement released on Tuesday, Huawei proclaimed that the Mate 60 Pro is the "most powerful Mate model ever."  

Both Huawei, based in Shenzhen, and its chip design subsidiary, HiSilicon, were included in the US government's trade blacklist, referred to as the Entity List, in 2019.

Due to US restrictions implemented in 2020, Huawei is prohibited from acquiring advanced integrated circuits (ICs) from major contract chip manufacturers, including companies like Taiwan Semiconductor Manufacturing Co and Samsung Electronics.

The Mate 40 series, introduced in October 2020, marked Huawei's final release of a 5G smartphone. This series utilized the Kirin 9000 system-on-a-chip, designed by HiSilicon, as its processing unit.

Semiconductor Manufacturing International Corp (SMIC), the operator of mainland China's largest chip foundry, is constrained to manufacturing 14-nanometer (nm) grade integrated circuits (ICs) due to restrictions led by Washington on the export of advanced chip-making equipment, such as extreme ultraviolet lithography machines.

In the first half of the year, mainland China's major wafer fabrication plants were affected by the prolonged slump in the consumer market and inventory reduction that didn't meet expectations. Zhao Haijun, CEO of SMIC (Semiconductor Manufacturing International Corporation), openly acknowledged that while both China and the global economy have returned to full operational status, the demand for electronic products has fallen short of projections. This has led to elevated inventories of integrated circuit products, diminished market confidence, and a continued need for chip companies to cut costs. Looking at the broader market, the mobile phone and consumer electronics sectors are still facing a period of innovation stagnation, lacking new breakthroughs. Demand has declined rather than grown, leading to extended replacement cycles. In sectors like personal computers, industrial applications, and new energy vehicles, supply and demand are gradually moving towards equilibrium.