As the global economy and society become increasingly digital, network security and resilience are growing concerns. Policymakers are now more focused than ever on ensuring the integrity of networks and scrutinizing the trustworthiness of network equipment vendors. Given known risks, certain restrictions have been placed by policymakers in various countries, preventing companies like Huawei and others from accessing advanced chip technologies.
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Setting aside the debate on the effectiveness of these restrictions, the key issue remains whether and how these limitations impact Huawei's ability to construct 5G mobile networks and other types of equipment. Huawei has attempted to find workarounds, but these come at a significant cost. The new study by Strand Consult titled "Huawei's supply chain challenges" explores this issue in detail.
In anticipation of chip restrictions, Huawei has stockpiled 7nm chips. Speculation abounds regarding when Huawei’s reserves of TSMC chips will deplete. TSMC, the world’s leading semiconductor foundry, severed its relationship with Huawei, one of its largest customers. The loss of TSMC’s chip supply constitutes probably Huawei's most pressing supply-chain challenge. Only Samsung and Intel can technologically compete with TSMC, and both also face restrictions regarding supplying chips to Huawei.
How a Huawei 5G mMIMO base station is built
Strand Consult conducted a teardown of specific Huawei products, examined the components, and assessed related supply chain challenges for Huawei and its customers, with a particular focus on the Huawei AAU NR Active Antenna—64T64R 200W 200/200MHz variant. Certain critical components were identified.
For instance, every physical mobile network site requires a baseband unit, regardless of 5G support or older generations. Baseband units need at least two Balong 7nm chips for most standard site configurations, with some configurations requiring up to 8-10 chips per site.
Each mMIMO site usually requires three mMIMO units. Operators typically deploy around 200 MHz bandwidth for 5G across various frequency bands, choosing different kinds of mMIMO units based on site capacity requirements. The most common deployment is a 32T32R mMIMO unit, while the 64T64R is common in dense urban areas. Each mMIMO unit requires a minimum of one Tiangang chip (7nm) for a 32T32R configuration and two chips for a 64T64R configuration, amounting to 3-6 chips per site, respectively.
This results in significant chip consumption at each base station. Given the number of base stations an operator deploys, the requirement can total hundreds of thousands of chips, and in some countries, it can reach into the millions.
Supply chain challenge triggers
At the FT-ETNO event on November 7, Deutsche Telekom CEO Tim Höttges emphasized that mobile operators should have access to the essential chips needed for their networks. This can be interpreted as a response to the sanctions affecting companies like Huawei, a major supplier to Deutsche Telekom.
Huawei has halted the introduction of new products and cards in their basebands and other product lines. Previously, they would frequently unveil new baseband cards and the next generation of mMIMO units, sometimes every six months, to leverage the benefits of the latest chipsets. However, the last baseband card Huawei introduced was in 2019.
Although Huawei has announced interim solutions, the technical elements of these products have not kept pace with advancements in chip technology.
In contrast, competitors like Nokia and Ericsson introduce new cards annually. Nokia has incorporated 5nm chipsets in its new baseband and mMIMO product lines. Similarly, Ericsson is following suit, with plans to move to 3nm technology, already featured in the latest iPhones. Without access to these innovations, Huawei's products risk becoming bulkier and more power-hungry, making them expensive for mobile operators. The critical question is how long operators will continue using equipment built on 14nm or older chips when more efficient alternatives with 5nm or 3nm chips are available—a gap that represents roughly a decade in semiconductor technology.
In some markets, Huawei has stopped promoting its mMIMO solutions, reportedly suggesting that 8T8R RRU is sufficient. This older model does not require 7nm chips, instead using 14nm or older technology.
Subsequently, to rationalize supply and prioritize customers, Huawei has increased prices for mMIMO products in certain markets.
Similarly, in the domain of optical gear (DWDM), Huawei advises customers against purchasing 400G capacity, pushing 200G capacity as optimal instead. This is because 400G requires 7nm chips, which Huawei lacks. In contrast, other optical vendors like Ciena and Nokia support 400G and are preparing for 800G and beyond.
In the Huawei teardown, Strand Consult also identified at least three flash memory chips with concealed manufacturer names, raising concerns about whether these components come from restricted or untrusted sources.
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Huawei declines to share its chip roadmaps with customers for 7nm and below, downplaying the importance of cutting-edge chipsets. Ironically, Huawei, once branding itself as a technological leader, now claims that the latest chips are unnecessary. This is akin to saying the iPhone7 is a decent Christmas gift when the 15th version is already on the market.
What Huawei tells the media
In "Huawei Can't Get Chips Off the Shelf," Huawei CTO Paul Scanlan told SDX Central that access to critical components is essential for any RAN vendor, particularly for Huawei, which struggles amid ongoing sanctions limiting its ability to acquire specialized silicon and other inputs. "It is a challenge. It's going to continue to be a challenge when you can't get access to certain types of components," Scanlan said.
While software can compensate for some requirements related to the weight and size of radios, Huawei's inability to access a 7nm chip means it must use two or three 14nm or 22nm chips instead. This significantly impacts the product's footprint, according to the CTO.
"You don't need a 7nm chip to make a good radio base station, but you do need excellent material science," Scanlan said. "Weight is a significant problem for the operator. You want to make the equipment lighter and smaller because these factors directly affect site rental and installation costs. Additionally, you aim to reduce power consumption year by year while maintaining or improving performance."
To illustrate the difference a 7nm chip can make, consider an automobile engine with 600 horsepower (hp). Replacing it with three 200 hp engines will require more space and energy, similar to how multiple older-generation chips would impact a base station.
Another Huawei Workaround
At Mobile World Congress 2021 and later in Dubai, Huawei introduced the concept of "Extremely-Large Antenna Array."
In practical terms, Huawei aims to compensate by adding more antennas into one unit. However, this is not an elegant solution to the chip access problem. The Extremely-Large Antenna solution results in antennas that are too big for some sites, requiring additional permits, higher rent, and increased maintenance. Huawei claims that over 100,000 of these stations have been deployed, but this is difficult to verify and is likely limited to China.
Increasing the number of antenna elements necessitates enlarging the antenna to meet minimal space requirements between antennas, which vary with frequency bands. Higher frequencies require less space, making this type of antenna bulky, especially for lower spectrum bands, complicating the overall site solution. Typically, operators use a mix of low, mid, and high-frequency bands.
The investigation suggests Huawei will face challenges in other product lines:
A comprehensive assessment of Huawei in mobile networks goes beyond mobile RAN discussions. Huawei's other business lines will likely also be impacted by these restrictions, including but not limited to:
- Mobile RAN - Special mMIMO and MIMO
- WDM (Wavelength Division Multiplexing)
- Core network solutions
- AI solutions
- Cloud solutions
- Server business
Strand Consult has studied network equipment rollouts in multiple countries, publishing reports on the distribution of such equipment by type and vendor over several years. These reports are crucial for policymakers, the press, and the public to understand and develop effective policies. Huawei likely disapproves of these reports but has not reached out to Strand Consult to offer any corrections or clarifications.
You can request Strand Consult's latest research, "Huawei’s supply chain challenges," which addresses Huawei’s chip challenges.
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