ZTE said yesterday that the company has chip design and development capabilities, and 5nm chips are under technology importing.
ZTE said this in response to investor questions. An investor asked a question on an online platform relating with the progress of the ZTE 5nm process chip.
ZTE responded that it "has chip design and development capabilities, 7nm chips have been mass-produced and achieved commercialization in the global 5G scale deployment, while 5nm chips are under technology importing".
Apparently, after the mass production of ZTE 7nm 5G base station chips last year, it has been successfully deployed and commercialized on a large scale this year.
It is expected that ZTE's 5nm 5G base station chips will be commercially available next year, and the new generation of 5nm 5G base station chips have also been introduced.
After the news broke out, ZTE's Hong Kong-listed shares surged today, up about 22% by the close of trading.
As we all know, in the field of 5G mobile phone baseband chips, with the withdrawal of Intel, only Qualcomm, Huawei, MediaTek, Samsung and UNISOC five manufacturers are left with 5G mobile phone baseband chip supply capabilities.
However, in the 5G base station side of the required 5G chips, due to the size and power requirements are relatively lower than 5G mobile phone chips, so there are more players in the field of 5G base station chips.
In addition to Huawei, the leader in the telecom equipment market, ZTE is also one of the key players.
In July last year, ZTE executive director and president Xu Ziyang said in a media interview that in terms of 5G base station chips, ZTE's 7nm process chips have been designed and mass produced, while 5nm process 5G chips are being developed.
According to Taiwan media reports, ZTE's self-developed 7nm 5G base station chip was developed by TSMC's 7nm foundry, which was developed by the Japanese company, ZTE. Moonlight Casting Control's 2.5D/interposer technology to seal the deal.
According to the figures announced by ZTE in September last year, ZTE had already won 35 commercial 5G contracts worldwide.
It has partnered with more than 60 operators worldwide for 5G and has shipped more than 50,000 5G base stations worldwide.
ZTE, meanwhile, expects to ship more than 100,000 of its 5G base stations by the end of 2019.
And these 5G base stations should all use ZTE's own 5G base station chips.
For many, there may be serious doubts about ZTE's R&D capabilities in the wake of the 2018 ZTE sanctions by the US.
This is because ZTE went into "shock" as soon as it was listed as an entity by the US.
In contrast, Huawei relied on chips it developed after being placed on the US Entity List in May 2019 and is still running smoothly. And Huawei's 2019 smartphone, base station shipments, and overall revenue are all still growing.
Indeed, Huawei's R&D is very strong, compared to the ZTE which is a bit weaker.
In fact, ZTE is still very strong in 5G technology and chip design capabilities.
According to IPlytics data as of January 1, 2020, there are 21,571 5G standard patent family statements in the 5G SEP patent (standard essential patent family) data defined by the European Telecommunications Standards Institute (ETSI).
According to the company to apply for classification, Huawei has the largest number of declared 5G standard patent families, reaching 3147 families, followed by Samsung (2795 families), ZTE (2561 families) is in third place, the amount of 5G standard patents declared far more than Nokia, Ericsson, Qualcomm and other strong communication manufacturers.
Even if we only count 5G patent families that have been granted in EPO, USPTO or WIPO PCT proceedings, ZTE (837 families) is in the top five, behind Samsung (1728 families), Nokia (1584 families), LG Electronics (1415 families) and Huawei (1274 families).
According to ZTE's 2019 Annual Report released at the end of March this year, ZTE's global patent filings at the end of 2019 were 74,000, 34,000 have been granted, and over 5,000 5G patents have been granted.
In addition, ZTE has submitted more than 7,000 5G NR/5GC proposals to global standards organizations.
Many people may not know that ZTE has always paid great attention to chip research and development, and has achieved a lot.
As early as 1996, ZTE set up a special chip design department, and the original purpose of setting up this department was to replace imported chips with self-developed chips, so as to reduce the cost of its own chips.
Therefore, after the establishment of the chip design department, the main direction of research and development is to include SDH/MSTP transmission, crossover chips, including bearer network equipment chips.
After that, ZTE started to increase the research and development of self-developed chips, and established Sanechips in 2003 to focus on the development of chips for mobile phones (including mobile phone modem chips), multimedia (including multimedia application processors, video image processors, power supply chips, terminal amplifier chips), Internet of Things, wired network chips (including fixed network terminal chips, Ethernet interconnect chips), wireless communications and other fields.
As for mobile phone chips, only two years after ZTE's chip designing arm Sanechips Technology was established, Sanechips successfully developed and mass-produced its first WCDMA baseband processing sleeve in 2005, breaking the foreign monopoly and ensuring the shipment of ZTE's own 3G products.
In 2013, at the beginning of the 4G boom, Sanechips also successfully launched its self-developed ZX297510 chip (codenamed "Xunlong 7510"), which was China's first 4G baseband processing chip based on 28nm process and supported TD-LTE/LTE FDD/TD-SCDMA/GSM multimode.
Since then, ZTE has also introduced a second-generation chip, the ZX297520, which can support five-mode full network access, while further improving performance metrics.
In terms of multimedia application processor, ZTE launched the ZX296702, a dual-core A9-based chip for the set-top box market at an early stage.
In 2016, Sanechips also targeted the OTT/IPTV set-top box market with a quad-core chip The ZX296716 features high integration and low power consumption. Also available is the ZX296719, a six-core chip targeting high-end smart surveillance and multimedia video applications.
In video image processing applications, Sanechips also has ZX2968XX series (ZX296805/ZX296870) high-definition video image processing chips, which can be widely used in urban security, home security, vehicle monitoring, consumer electronics and other fields.
In terms of power supply chips, Sanechips offers fully customized and highly reliable power supply chip designs, including charge management and protection chips, high-voltage high-current DCDC controllers (ZX234020), and electronic cigarette control chips (ZX234015/ZX234016).
In terms of terminal amplifier chips, Sanechips has developed a series of terminal amplifier chips, including ZX234610 series and ZX234611 series, which cover all mainstream frequency bands and communication modes and are mainly used in 3G/4G smartphone products.
In terms of fixed network xPON terminal chips, Sanechips has ZX279125, ZX279127, ZX279128, ZX279131 and other series products that support HGU, MDU, SFU and other product applications, which have been widely applied to a variety of ONT products in FTTx networks such as Telecom, Unicom and Mobile.
As for Ethernet Internet chips, Sanechips has a series of 10BASE-T/100BASE-TX/1000BASE-T Ethernet transceivers (ZX2AA500, ZX520X series) that use oversampling technology and the latest digital signal processing technology, claiming to have the industry's smallest area and lowest power consumption.
In terms of IoT chips, Sanechips successfully launched its first NB-IoT chip Vermilion Bird RoseFinch 7100 in 2017, and in September of the same year, together with SMIC, officially announced the commercial launch of the RoseFinch 7100, which is manufactured on SMIC's ultra-low-power RF embedded flash (55nm ULP RF eFlash) process platform.
In the field of wireless communication chips, from the 3G to 4G era, and now to the 5G commercial stage, ZTE's base station products are basically all self-developed base station chips.
According to the Sanechips website, ZTE UMTS base station products using its wireless silicon solutions had the second largest combined market share in China Unicom's 3G network, and a global share of more than 25 percent for 4G base stations.
With the 5G construction boom last year, ZTE's 7nm 5G base station chips have been mass-produced and will be commercially deployed globally this year.
The next generation of 5nm 5G base station chips are also being introduced into the technology. ZTE's 5nm 5G base station chips are expected to be commercially available next year.
Since its establishment, Sanechips has developed and successfully commercialized more than 100 kinds of chips, covering the field of communication network "bearer, access, terminal".
They serve more than 160 countries and regions around the world, and have been named one of the "Top 10 IC Design Enterprises in China" for many years.
Currently Sanechips has over 2000 R&D staff and 11 R&D facilities worldwide.
After more than a decade of development, Sanechips has mastered the world-class IC design and verification technology, and owns advanced EDA design platform, COT design service, development process and specification, which can provide one-stop design service for customers.
Sanechips has applied for more than 4,000 chip patents, including more than 1,800 PCT international patents and more than 200 5G chip patents.
At the ZTE financial report meeting at the end of April this year, Xie Junshi, Executive Vice President and Chief Operating Officer of ZTE, also stressed that ZTE has the ability to cover the whole process in terms of chip R&D and design capabilities.
Whether it is the earliest architecture design, simulation, front-end design, back-end physical implementation, package design, package testing and future failure analysis of the corresponding chip, the full lifecycle can be realized in R&D design.
ZTE's achievements in 5G technology and chip design cannot be achieved without years of continuous investment in research and development.
According to ZTE's financial report, over the past five years, ZTE's annual investment in research and development has averaged more than 12 billion yuan, and the proportion of research and development investment in the overall revenue has always been more than 12%.
Even when ZTE suffered a shutdown in 2018 due to U.S. sanctions, it maintained its R&D investment at around $11 billion and its share of R&D investment exceeded 12 percent.
Although ZTE's average annual R&D investment of more than $12 billion over the past five years is much less than Huawei's average annual R&D investment of more than $90 billion over the past five years.
However, in terms of the percentage of R&D investment in total revenue, ZTE has always been around 12-14%, while Huawei has always been around 14-15%, so the two are still relatively close.
