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China’s chip maker Huawei has launched a new chip set series as China’s efforts to boost its domestic chip production is being thwarted by US-China trade war. The Asian giant being heavily dependent on USA, in a bid to achieve self-sufficiency has started several projects including Fujian Jinhua.

Huawei derives most of its revenues by selling smartphone and telecommunications equipment’s is looking to expand its reach in enterprise services and cloud computing. The shift comes in the wake of growing suspicions in the Western countries about the nature of Huawei’s equipment and Chinese Government’s influence on the company. Huawei’s CFO was recently arrested in Canada when the company refused to stop trade relations with Iran amid USA’s sanctions on the Middle Eastern country.

Chinese firms are trying to insulate themselves from the US-China trade war which has seen USA and China impose trade tariffs on each other’s imports.

Huawei’s subsidiary HiSilicon has designed the chipset called Kunpeng920 recently launched by the company. The chipset has raised the company’s status as a premier in semiconductor business. The chip is a 7 nanometer with a central processing unit (CPU) of 64 core. The chips architecture is inspired by British firm ARM’s design owned by Japan’s Softbank Group which is seeking to challenge the American dominance in sever-CPUs.

Huawei’s aim will harness the development of ARM ecosystem. The chip has unique advantage in power consumption and performance, according to the company. The company also clarified that the ARM CPU based server will not compromise its long-term strategic relationship with Intel Corp.  Taishan Series of servers based on the chipset were also launched on Monday, which are built for ARM native applications, distributed storage and big data.

The firm’s subsidiary HiSilicon was founded in 2004 to reduce its heavy reliance on imports. The firm uses 54% of internally sourced chips while 22% comes from Qualcomm, says evidence placed in antitrust trial against Qualcomm.

 The semiconductor Chip industry is facing a lot of turmoil in both USA and China. Reports claim that 13 Canadians were detained in China after the arrest and awaited extradition of Huawei’s CFO Meng Wanzhou in Canada. The business rivalry has turned into a diplomatic and political muscle-flexing. US-State department has also notified a travel advisory warning American citizens travelling to China about arbitrary enforcement of local laws in the country.

Consumer Electronics Show 2019 marked a major step towards adoption to 5G technology with successful testing of 5G video call by T-Mobile with its partners Intel and Ericson. The 5G video call was tested by using a diverse array of wireless spectrum bands from low frequency, mid-frequency to high frequency.

The call was tested by using three spectrum bands of 28Hz, 39Hz and 60Hz. T-Mobile managed to cover 1000 miles of distance by using 600Hz spectrum band.

Signals transmitted at higher frequencies can transfer more data at faster speed while those transmitted at low frequencies travel longer distances but at reduced data speed. Telecom companies face the challenge of combining different frequency bands to cover huge distances to offer seamless data services.  High frequency wavelengths is key to offer 5G high speeds.

The 5G term derives from the fifth generation of advancements in cellular technology which promises to greatly enhance the coverage, speed and responsiveness to the wireless data transmission technology. The technology has potential to provide 10 to 100 times speedier transmission than regular data networks. This will easily outstrip whatever a physical fiber optic cable speeds.

The company stated that the 5G video call demonstration is a decisive milestone in the evolution of 5G technology. The test involved multiple spectrum bands of low, mid and millimeter wavelengths. The 5G technology domain has seen rapid strides by competitors of T-Mobile like Verizon and AT&T. Verizon wants to launch its 5G services in 2019 and has already launched its home based 5G broadband service in selected cities. AT&T is planning a similar launch date by using commercial launch of its hotspot device.

T-Mobile has already participated in spectrum band auction and owns some low frequency bands. While it waiting to gain new millimeter frequency bands through its acquisition of Sprint. The 5G technology industry is witnessed significant developments in recent months as more and more companies announce plans to enter the business. At CES 2019, Ford Motor Company has also announced that all its automobiles from 2022 onwards will be equipped with 5G technology. Verizon has also demonstrated its first 5G enabled smartphone device. Qualcomm Inc. The largest chip maker in the world has announced that its chips will be used to enable 30 new 5G enabled smartphones waiting to be launched by the end of 2019.

World’s third largest chipmaker, Taiwan’s United Microelectronics Corp. is scaling down its dynamic random access memory (DRAM) project Fujian Jinhua. The company recently moved 140 employees of 300 staffer DRAM project internally to other departments. The move is significant when the project is in a suspension mode since November 2018 when USA banned all supplies to the company accusing it of stealing Micron’s Intellectual property and for indulging in economic espionage activities in collaboration with the Chinese government.

Fujian Jinhua project is backed by the Chinese government in a bid to achieve self-sufficiency in chip making business heavily monopolized by South Korea based companies including Samsung Electronics, S K Hynix and USA’s Micron. The three companies control around 96% of chip making business. The project was aimed at achieving self-reliance funded only by central and state government funds. UMC in late 2016 announced a technology partnership with Fujian Jinhua to help develop DRAM technology.

The project with massive investment of $5.6 billion is based Jinjiang, a city in Southern China. The project was due to enter production trial in December 2018, but ban by USA threatened UMC’s chip making business which relies heavily on American supplies for semiconductor equipments such as Lam Research and Applied Materials. The supplies to the semiconductor chip making company was halted by USA on the charge of intellectual property rights violations of Micron. The crackdown is aimed to smother China’s technology ambitions and punish the Asian giant for IPR appropriation which is major bone of contention between the two economic superpowers.

UMC although has refused to declare the winding up of the project explicitly in fear of angering the Chinese government. The internal transfers is regular exercise and had nothing to do with the project claimed the chief financial officer of UMC Liu Chi-Tung. He declined to comment further on the matter.

Equipments worth US$980 million purchased by Fujian Jinhua lie at UMC’s Tainan site after the project was temporarily halted by USA block.

Employees of the DRAM team have already started looking for new jobs as they feel UMC is planning to ditch memory chip development business altogether. The company is stuck between the US China trade war. Although the prospects for the business were good, the tensions between the two giant economies is harming the company.

UMC is in mainly in the business of making chips for graphics processors, Wi-Fi and Bluetooth chips, mobile processors and automotive chips. The company serves clients such as MediaTek, Qualcomm, AMD, Novatek, Infineon, Realtek and Rockchip and Allwinner Technology.

 5G Technology has alarmed many in the security establishment of USA and Europe. A technology which has shown promises to revolutionize telecom sector radically in next couple of years has also posed a major security threat to national security according to experts. The technology has many loopholes which can also be exploited to conduct espionage operations. Intelligence agencies have warned of impending chaos if the threat is not addressed. EU is following similar suit following US lead to stop Chinese telecom companies from creating 5G base in the nation’s territory.

The Trump White House is considering to roll out an executive order to ban US companies from starting joint ventures and also use equipments made by Chinese companies Huawei and ZTE. American suspicions about the technologies possible espionage usage has alarmed many countries in the European Union. Italy, Finland, Spain, Germany, Austria, and Belgium have raised similar concerns about the technology’s possible abuse by Russian and Chinese intelligence agencies.

The battle became fierce with the arrest of Huawei’s chief financial officer Meng Wanzhou, after the company refused to cooperate with US on sanctions against Iran, a strategic ally of the Chinese Communist Party.

Huawei and ZTE have a reputation of openly collaborating Chinese intelligence agencies. British intelligence agencies were one of the first to point out the potential danger of using Chinese 5g technology equipments. Others in the EU who have to shunned ties with the Chinese companies include French telecom provider Orange who recently declared that it will stop using any Chinese equipments. Germany’s Deutsche Telecom is also reportedly cooperating with security agencies to address their concerns. The company has resisted any move to totally ban Chinese equipments, as T-Mobile Network owned by Deutsche Telecom has entered into a partnership agreement to unroll 5G network in Poland. 

. The total ban on Chinese companies is not economically viable either as Chinese 5G market is one of the largest in the world. Any move to ban the companies will raise fears of retaliatory actions by the Chinese government. Telecom industry in EU has a lot at stake here as it tries to gain access to the huge telecom market of the Asian Giant.

Telecom Reports predict the internet traffic to be thirty times more than in last decade by year 2020. 5G Tech will provide a solid base for EU’s one trillion euro digital market. Brussels has already invested 700 million euros in the program Horizon 2020 to promote innovation and research in 5G technology.