The chip is set to be included in some phones of the Mate 70 series to go on sale next week, they said. With the series, the Chinese smartphone maker hopes to challenge Apple and build on market-share gains since last year. The iPhone maker still counts China as its second-largest market after the U.S., but after years of dominating high-end phones it has faced growing competition from Huawei.
In recent days, Huawei has given glimpses of the Mate 70 series online, including showing three camera lenses on the back of the phones, and the company said it would make a product announcement on Tuesday.
Huawei hasn’t given details of the phones’ features or the chips inside them—an area of interest for U.S. policymakers who have sought to hold back Huawei’s technology. The company was put on a trade blacklist during the first Trump administration in 2019.
A Huawei representative declined to comment on the chips in the new phones.
The company’s ability to continue making incremental advances in semiconductors is both a security concern for the U.S. and a commercial challenge for Apple. Huawei’s overall market share in China has risen to 15.3% in the third quarter of this year from 8.6% in the first quarter of last year, according to industry researcher IDC, and it has been neck-and-neck with Apple in recent quarters.Huawei’s fortunes have improved in part because of nationalistic buying by Chinese consumers and because of features including its powerful cameras and, more recently, artificial-intelligence functions. Apple has yet to bring its Apple Intelligence features to China.
The two companies compete in particular in the high-end market. Huawei’s current flagship model line, the Mate 60 series, starts at $690 in China, while Apple’s iPhone 16 series retails for about $830 and up in China.
“The Mate 70 will continue to put more pressure on Apple in China,” said IDC Vice President Bryan Ma. While Huawei’s chips still trail Apple’s, particularly in power efficiency, “this might not amount to much of a practical difference as long as the user is able to get through the day without having to worry about charging,” he said.
Huawei is taking preorders in China for the Mate 70 series and said on its website that around 2.5 million people have clicked a button online saying they intend to purchase the device, although they can change their minds later.
Huawei has sidestepped U.S. sanctions with domestic technology. When Google cut access to some of its Android services on Huawei smartphones, the Chinese company developed its own operating system called HarmonyOS Next. The coming Mate 70 series, which has three models, will use that software, the people said.
In August 2023, Huawei surprised U.S. officials by introducing its Mate 60 series of smartphones with communications capability similar to high-speed fifth-generation phones available in other countries, even though it could no longer access 5G-related technology from the U.S.
Another surprise at the time was the processor in the Huawei phones, made with the help of a Chinese chip factory. While still trailing the best chips made by Taiwan Semiconductor Manufacturing, Apple’s partner for the iPhone, the Huawei chip was closer to Apple’s than many in the industry had expected.
Huawei released the Mate 60 series during a visit to Beijing by U.S. Commerce Secretary Gina Raimondo, thumbing a nose at Washington.
A teardown of a Mate 60 Pro phone by TechInsights, a Canadian research firm, found the integrated circuit inside was made with technology similar to 7-nanometer technology used by advanced factories in the U.S. and Taiwan. The nanometer figure reflects the size of transistors that can be packed onto a chip, with a lower figure designating more advanced technology. TSMC’s most advanced commercially available chips are in the 3-nanometer class.
TechInsights said the chip in the Mate 60 phone was likely made by Semiconductor Manufacturing International, the largest contract manufacturer of chips in China. SMIC is also blacklisted by the U.S., depriving it of leading chip-making equipment.
SMIC has employed a technique called multiple-patterning lithography to print finer circuit designs on the surface of wafers, circumventing the limits of its equipment, according to TechInsights. However, industry experts said the method could reduce the yield of usable chips and cost more.
Multiple patterning and other techniques used for the chip in the new Mate 70 series allow Huawei to improve power efficiency and performance, the people said.
Analysts said Huawei was facing manufacturing bottlenecks for the Mate 70 series. Some Huawei dealers have told consumers they may need to wait for months if they miss their initial chance to order a phone.
Recently, the U.S. has intensified scrutiny into how Huawei and other blacklisted Chinese firms are able to skirt export controls and acquire leading chip technology. Core circuitry produced by TSMC was found in some of Huawei’s AI chips, and the U.S. told the Taiwanese company to tighten supervision of orders by Chinese customers related to AI applications, according to people familiar with the matter.
Huawei is expanding investments into many parts of the semiconductor supply chain such as lithography, assembly and testing in addition to its chip-design house HiSilicon.
Write to Liza Lin at liza.lin@wsj.com and Raffaele Huang at raffaele.huang@wsj.com
