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HiSilicon, Huawei's elite chip division, has placed 14nm orders with Semiconductor Manufacturing International (SMIC), China's top chipmaker, according to a DigiTimes report today citing unnamed industry sources.

HiSilicon's Kirin 710 smartphone processor, which is based on TSMC's 12nm FinFET node, has been out since mid-2018. There is a rumor that HiSilicon is planning to release a gimped variant of the Kirin 710, the Kirin 710A. Kirin 710A is expected to leverage the 14nm FinFET process and, thus, HiSilicon needs a fab that's capable of pumping out the chips.

If DigiTimes' report is true, SMIC has scored a big victory over TSMC, as the Taiwanese foundry has been a core provider of chips for HiSilicon. The recent change would indicate that SMIC's 14nm FinFET manufacturing process has improved to a point where it can go head-to-head against TSMC's process node. Furthermore, the U.S. may block TSMC from selling to Huawei, so that could be another reason why HiSilicon decided to switch from TSMC.

SMIC's first-generation 14nm FinFET process has been up and running since the fourth quarter of 2019. The Chinese fab's financial data reveals that the node contributed to about 1% of the company's total wafer revenue in Q4; however, SMIC plans to ramp up production progressively this year.

Although SMIC might seem like an underdog compared to TSMC, the Chinese chipmaker shouldn't be underestimated. SMIC is looking to skip the 10nm node completely and transition straight to the 7nm node. The company expects to run risk production of its 7nm process by the end of 2020. TSMC's EUV process is proceeding smoothly. HiSilicon is allegedly on TSMC's client list to leverage the EUV node; however, that'll depend on the outcome of the proposed U.S. block on Huawei.

China continues to push hard to phase out foreign tech and achieve self-sufficiency. SMIC is one of the pieces on the board that China can use to accomplish its goals.