Chinese chip stocks rallied on Wednesday following Huawei Technologies' (HWT.UL) launch of its new Mate 60 Pro phone, as investors speculated it could be using a 5G capable chip which, if true, would be a win for China's local semiconductor sector.
Since 2019, Washington has restricted Huawei from buying advanced chips and software from U.S. companies, which has decimated its consumer electronics business and left it only able to launch limited batches of 5G models using stockpiled chips.
But research firms told Reuters last month that they believed Huawei was plotting a return to the 5G smartphone industry by procuring chips domestically, using its own advances in semiconductor design tools along with chipmaking from Semiconductor Manufacturing International Co (SMIC). Huawei declined to comment at the time.
On Tuesday, the company began selling its Mate 60 Pro around midday for 6,999 yuan ($960) in an unusually low-key fashion, having given no advance notice or conducted advertising. Staff at Huawei and sales personnel at stores in Beijing and Shenzhen also told Reuters they were caught off-guard.
The specifications provided for the Mate 60 advertised its ability to make satellite calls, but provided no information on the power of the chipset inside.
Still, online users who managed to purchase the phone began posting videos of themselves conducting tests that they said showed it could match the network speeds of 5G chipset phones as well as screenshots saying it used a Kirin 9000s chip. Reuters was unable to verify these claims.
The phone's launch also rose to be the number one most searched subject on Weibo, China's version of X, on Wednesday with excited netizens saying the launch marked the overcoming of U.S. restrictions.
In an indication that the phones were selling fast, by the afternoon Huawei's website said buyers would only be able to receive their phones earliest on Sept. 17.
Huawei, whose woes with Washington have become a key flashpoint in U.S.-China relations, declined to comment on whether the phone was 5G capable but said in a statement the Mate 60 series was its most powerful Mate model ever.
The launch of the Mate 60 Pro also coincided with U.S. Commerce Secretary Gina Raimondo's visit to China. On Tuesday, she said the U.S. had rejected a Chinese request to reduce export controls on technology.
CHIP SHARES JUMP
China's semiconductor sector (.CSIH30184) jumped more than 2.5% on Wednesday, sending weekly gains to roughly 8%. China's Semiconductor Manufacturing International Corp is up roughly 10% for the week.
Retail investor Lu Deyong said he bought shares in semiconductor firm Sai MicroElectronics Inc (300456.SZ), which has business connections with Huawei, and the tech-focused STAR 50 Index (.STAR50), following the launch of the new Huawei phone.
"Shares rose and I saw that large sums of money flowed in, which showed very good attitude toward the launch and the technology behind it," Lu said. "I cannot confirm if the technology is authentic, but I hope it is."
Nicole Peng, Senior VP of Mobility at Canalys, said it would be crucial for Huawei to provide clarification on its technology, given the high level of market interest.
"If it is indeed true that Huawei is able to develop own 5G SoC (system-on-chip) that exceeds industry current development timeline, it signals a significant leap in its R&D capabilities. It creates huge disruption to the semi industry especially to its competitors," she said.
"On the other hand, the doubt surrounding Huawei's ability to develop 5G SoC and its vagueness about the product and launch could harm its credibility in the long run. It could turn south if the claims are false."
($1 = 7.2897 Chinese yuan renminbi)
