Chinese Technology Giant Huawei Intends to Revolutionize Chip Manufacturing

The core of the new concept is a departure from the decades-long focus on shrinking transistor sizes to improve performance in semiconductor manufacturing. Previously, smaller transistors packed more densely on chips increased performance while reducing energy consumption. Huawei aims to move away from this model, improving performance not by continuously shrinking transistors but by reducing the distance data must travel within the processor.

The new technology is called LogicFolding. It divides the conventional flat chip topology into computing blocks and stacks them on top of one another so that information can be transmitted faster. Although similar approaches are already used by leading chip manufacturers, including Taiwan’s TSMC, Huawei is proposing a more radical solution.

What challenges might Huawei face in implementing LogicFolding technology? Adding new elements to a multilayer chip structure significantly increases manufacturing complexity and raises the likelihood of defects.

In addition, a multilayer structure can create serious heat dissipation problems, as densely packed chips tend to retain more heat and may require more advanced cooling systems. Experts note that one of the main advantages of flat chips is their maximum surface area for heat dissipation.

It is still difficult to say whether Huawei will be able to achieve economic viability and scale up the new technology. Later this year, the company plans to introduce a new generation of smartphones featuring chips manufactured using LogicFolding technology.

In any case, Huawei has little to lose from developing this technology, as the company has already reached the physical limits of its current manufacturing capabilities. Due to U.S. export restrictions, the company has been deprived of access to advanced technological solutions necessary for designing and producing smaller transistors.

If successful, such a breakthrough could allow Huawei to circumvent these trade restrictions by improving chip performance through its own engineering innovations rather than relying on foreign technologies to which it currently has no access.

Advancing chip manufacturing technology is essential for the further development of artificial intelligence. In this field, China and the United States are actively competing with each other, and restrictions on access to high-tech products from American companies (primarily Nvidia) could significantly weaken China’s competitive position.

Since microchips are essential for the development of the military-industrial complexes of both countries, the United States uses foreign trade sanctions against China as a tool to limit its military-industrial potential. Fully aware of this, China’s leadership intends to rely on its own capabilities by developing domestic chip production and other high-tech industries. Ultimately, the U.S. effort to eliminate its main competitor in the market may lead to the strengthening of China’s technological sovereignty and the creation of new advanced technologies by its companies.

Author: Doctor of Economics, Professor of the Department of World Economy and World Finance at the Financial University under the Government of the Russian Federation Igor Alekseevich Balyuk.