Two Chinese chipmakers are in the early stages of producing high bandwidth memory (HBM) semiconductors used in artificial intelligence chipsets, according to sources and documents.

The progress in HBM - even if only in older versions of HBM - represents a major step forward in China's efforts to reduce its reliance on foreign suppliers amid tensions with Washington that have led to restrictions on U.S. exports of advanced chipsets to Chinese firms.

CXMT, China's top manufacturer of DRAM chips, has developed sample HBM chips in partnership with chip packaging and testing company Tongfu Microelectronics, according to three people briefed on the matter. The chips are being shown to clients, two of them said.

Tongfu Microelectronics' shares surged 8% in Wednesday trade.

In another example, Wuhan Xinxin is building a factory that will be able to produce 3,000 12-inch HBM wafers a month with construction slated to have begun in February this year, documents from corporate database Qichacha show.

CXMT and other Chinese chip firms have also been holding regular meetings with South Korean and Japanese semiconductor equipment firms to buy tools to develop HBM, said two of the people.

The sources were not authorised to speak on the matter and declined to be identified. Hefei-based CXMT or ChangXin Memory Technologies and Tongfu Microelectronics did not respond to requests for comment.

Wuhan Xinxin, which has flagged to regulators that it is interested in going public, and its parent company did not respond to requests for comment. The parent company is also the parent of NAND memory specialist YMTC or Yangtze Memory Technologies. YMTC said it did not have the capability to mass produce HBM.

Both CXMT and Wuhan Xinxin are private companies which have received local government funding to advance technologies as China pours capital into developing its chip sector.

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Wuhan's local government also did not respond to requests for comment.

Separately, Chinese tech behemoth Huawei - which the U.S. has deemed a national security threat and is subject to sanctions - is aiming to produce HBM2 chips in partnership with other domestic companies by 2026, according to one of the sources and a separate person with knowledge of the matter.

The Information reported in April that a Huawei-led group of companies aiming to make HBM includes Fujian Jinhua Integrated Circuit, a memory chip maker also under U.S. sanctions.

Huawei, which has seen demand soar for its Ascend AI chips, declined to comment. It is not clear where Huawei procures HBM. Fujian Jinhua did not respond to a request for comment.

LONG JOURNEY AHEAD

HBM - a type of DRAM standard first produced in 2013 in which chips are vertically stacked to save space and reduce power consumption - is ideal for processing massive amounts of data produced by complex AI applications and demand has soared amid the AI boom.

The market for HBM is dominated by South Korea's SK Hynix - until recently the sole HBM supplier to AI chip giant Nvidia according to analysts - as well as Samsung, and to a lesser extent U.S. firm Micron Technology. All three manufacture the latest standard - HBM3 chips - and are working to bring fifth-generation HBM or HMB3E to customers this year.

China's efforts are currently focused on HBM2, according to two of the sources and a separate person with direct knowledge of the matter.

The U.S. has not put restrictions on exports of HBM chips per se but HBM3 chips are made using American technology that many Chinese firms including Huawei are barred from accessing as part of the curbs.

Nori Chiou, an investment director at White Oak Capital and a former analyst who looked at the IT sector, estimates that Chinese chipmakers lag their global rivals by a decade in HBM.

"China faces a considerable journey ahead, as it currently lacks the competitive edge to rival its Korean counterparts even in the realm of traditional memory markets," he said.

"Nonetheless, (CXMT's) collaboration with Tongfu represents a significant opportunity for China to advance its capabilities in both memory and advanced packaging technologies within the HBM market."

Patents filed by CXMT, Tongfu and Huawei indicate that plans to develop HBM domestically date back at least three years when China's chip industry increasingly became the target of U.S. export controls.

CXMT has filed almost 130 patents in the United States, China, and Taiwan for different technical issues related to the manufacturing and functionalities of HBM chips, according to Anaqua's AcclaimIP database. Of those, 14 were published in 2022, 46 in 2023, and 69 in 2024.

One Chinese patent, published last month, shows the company is looking at advanced packaging techniques like hybrid bonding to create a more powerful HBM product. A separate filing shows that CXMT is also investing in developing technology needed to create HBM3.

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Huawei flagship store surge in China signals showdown with Apple

Huawei is revamping its retail strategy and aggressively opening flagship stores in China, with some just a stone's throw away from Apple shops, as it seeks to retake the premium electronics throne in the world's biggest smartphone market.

Situated directly across from Apple's Shanghai flagship store, Huawei's recently renovated shop spans three floors of a famous heritage architecture building in the financial hub's busy shopping district and includes a coffee shop and a gym.

Huawei opened four such stores in major Chinese cities between December and February, an aggressive marketing blitz by a company that had largely relied on licensed distributors and is rebounding from U.S. sanctions imposed in 2019 that had crippled its smartphone business for four years until it could source domestic replacement parts.

"The Huawei flagship store is very nice. It looks much brighter inside compared to the Apple Store across the street," said Amy Chen, a 27-year-old physiotherapist who visited the Shanghai store this week to switch to Huawei's top-end Pura 70 Ultra from the iPhone 15 Pro in hopes of better mobile reception.

Apple has 47 stores in mainland China. Huawei, which did not open a flagship store until 2019, now has 11 of them.

"I think they will open more than 20 of them. Then it will eventually catch up to Apple," said Ethan Qi, associate director at research firm Counterpoint.

It marks a stark contrast to 2021 when the company's licensed stores were shuttered across China due to product shortages caused by the U.S. sanctions.

Huawei has since developed its own chips, introduced highly popular 5G-capable products and, according to sources, has started aggressively recruiting dealers in recent months.

"As Huawei now manages to ship in large quantities, given the good profit margin they could provide, (distributors) have become willing to purchase Huawei devices again," Qi said. "Previously, many couldn't get stock and their 4G devices didn't sell well."

Huawei has been actively bargaining with distributors, touting the above industry average profit margins of its phones and sometimes demanding exclusionary clauses to turn them into its exclusive partners, according to two industry sources.

More than 5,200 stores licensed to sell Huawei products sprang up through the first 10 months of 2023, with more than half of them in third and fourth-tier cities, according to market research firm GeoQ, helping Huawei expand its army of distribution partners nationwide.

Its renewed marketing push poses a major challenge to Apple, which suffered a 6.6% plunge in iPhone sales in China to 10.8 million in the first quarter, according to IDC data. By contrast, Huawei boosted its smartphone shipments by 110% to 11.7 million in the first quarter and overtook Apple as the No.2 smartphone vendor in China.

Huawei and Apple did not respond to requests for comment.

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PREMIUM PUSH

Lucas Zhong, an analyst at research firm Canalys, said Huawei had plans to build out its flagship stores since 2020 but the progress was slowed by the U.S. sanctions, which led to a much slower iteration of its high-end products.

There are still supply chain issues leading to shortages of specific models, but they are under much better control and the new phones are garnering good reviews. That means Huawei is now putting its focus squarely on selling premium products that compete with Apple, according to analysts.

Its latest Pura 70 Ultra smartphone, for example, starts at 9,999 yuan ($1,300), matching the price tag of the iPhone 15 Pro Max, while Samsung and Xiaomi are keeping prices for their premium models lower amid soft market demand.

Huawei's luxurious flagship stores display premium products ranging from smartphones to tablets, smartwatches, televisions and even electric vehicles made in partnership with Chinese automakers.

"Huawei now has a long product line," Qi said. "They need big demo areas… They will have to do it themselves because their distributors don't have the capability to rent such a massive area."

The push to build more of its own stores also underscores Huawei's heavy reliance on offline sales. Between 70% and 80% of Huawei's sales come from physical stores, while Apple sees about 40% of its sales coming from online, according to Toby Zhu, another analyst at Canalys.

"Xiaomi, Oppo and Vivo are all being affected (by Huawei's comeback)," Zhu said, referring to other Chinese smartphone makers. "But for now, the biggest impact has been on Apple."

And the impact is beginning to be felt beyond mainland China.

Simon Lam, owner of a popular smartphone shop named Trinity Electronics in Hong Kong, said more independent smartphone shops had started selling Huawei devices in recent months.

"Everybody is stocking up on some Huawei right now. Some more, some less," he said. "People are willing to pay a lot of money for high-end Huawei, something other brands really can't compare with."

Huawei enriches ‘Creation of Beauty’ concept with three innovative products and new technologies

MateBook X Pro.

Towards the end of 2023, Huawei launched its ‘Creation of Beauty’ concept to global consumers. The event confirmed the release of the MatePad Pro 13.2”, MateBook D 16 and FreeClip earbuds, with each product designed to help users unleash their inner creativity. Taking place on 7th May, Huawei’s Innovative Product Launch has enriched the campaign, introducing the latest flagship MateBook X Pro, MateBook 14, MatePad 11.5”S, new self-developed GoPaint APP, and Super Device.

Just like the previous launch, these innovative products are designed to enhance productivity and stimulate people’s potential to be creative. Huawei has also introduced developed technologies that will enable people to create, such as the all new Huawei Cloud Falcon Architecture, Shark Fin Heat Dissipation System, Super Turbo and PaperMatte Display.

MateBook X Pro

Huawei has spent the last two years upgrading its MateBook X Pro’s design and materials, bringing improved temperature regulation and battery life with the new MateBook X Pro. Despite featuring a high-performance processor, the MateBook X Pro is only 980 grams and 13.5 mm thick, making it the lightest and thinnest Huawei laptop to date. Its long-lasting battery makes it ideal for 4K video rendering, export and large software programming.

As mentioned, the MateBook X Pro has adopted the innovative Huawei Cloud Falcon Architecture. This allows the internal structure of the PC to be more compact, making room for a larger battery, fan and speaker, so its performance isn’t limited by space. Its Shark Fin Heat Dissipation System is fully upgraded, allowing the AI temperature control algorithm to intelligently adjust the temperature control policy.

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Huawei has created a uniquely smooth and metallic body for the MateBook X Pro, making it warm and comfortable to the touch. The shell is also more scratch-resistant and durable for carry-out scenarios.

The Huawei X-True display technology works to provide users with a smoother reading experience, even in dark environments. Each Huawei MateBook X Pro screen has been professionally colour-corrected and equipped with two intelligent sensing features, AI Noise Cancellation and AI Camera. These additions mean users will no longer have to change computers for more intelligent functions that improve creativity.

The brand-new Super Turbo technology can intelligently detect different application scenarios, introducing corresponding optimisation policies in a timely manner. The system can be accessed within one second after the cover is opened, and the startup is as fast as twisting the cap. With the support of Super Turbo, the system response speed is further improved.

MateBook 14

In order to improve the MateBook 14’s heat dissipation capability, Huawei engineers designed a unique high-flow air vent at the bottom of the laptop. This also features an Air dot pattern design, bringing a more refined appearance.

The Huawei MateBook 14 also comes in a vibrant and natural green colour, which is a new shade for Huawei altogether.

MatePad 11.5”S

Another innovative technology is Huawei’s PaperMatte Display, adopted by the Huawei MatePad 11.5”S. This means the tablet can effectively reduce screen reflection and scattered light, reducing blue light radiation and protect its user’s eyes. It also retains the matte experience of real writing, taking away any unwanted fluidity. The touchscreen is also more responsive and doesn’t leave fingerprints.

The Huawei MatePad 11”S comes with a split-type magnetic keyboard, allowing users to stand the tablet on a small desk and type on the keyboard. This is particularly useful for young professionals working from small spaces, or those who travel widely.

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It also supports cross-app colour retrieval, giving users the ability to quickly and easily retrieve selected colours from Gallery, web pages or other apps, before transferring them to the drawing you are creating.

Each of the innovative products surround Huawei’s aim to inspire users’ creativity. Not only are the devices intricately designed to deliver an optimal performance, but are made to improve their user’s experience and overall productivity levels. The new technologies also provide a wider breadth of intelligent functions, without impeding on appearance or production.