The joint venture aims at designing semiconductors at 14 nanometres that will be made at a SMIC fab on the mainland.
Right now, according to Trendforce analysts, SMIC currently has the capacity to make 140,000 eight inch silicon wafers and 50,000 12 inch wafers a month but its process is only 40 to 45 nanometres.
Trendforce said that one of its clients is helping it to move to a 28 nanometre production process.
Huawei however has a subsidiary called HiSilicon which competes with Qualcomm and this may through a spanner in the joint venture.
But Imec, a Belgian research centre has a track record of leading research into process sizes and is even working on seven nanometre process technology.
Trendforce believes it will be between three to five years before the SMIC alliance bears fruit. But we wouldn’t be too sure about that, given the gravitas of the different players and their different strengths.