TAIPEI -- China's Huawei Technologies, which recently surpassed Apple as the second-largest smartphone maker worldwide, on Friday announced what industry analysts say is the world's most powerful chipset for mobile devices.
The move showcases Huawei's advances in in-house semiconductor development and the company's determination to cut its dependence on foreign chipmakers.
Huawei's announcement at the IFA electronics show in Berlin comes two weeks before Apple unveils its new iPhones. The timing underscores Huawei's desire to overtake the U.S. tech giant in both smartphone shipments and chip technology.
The Chinese company's new Kirin 980 core processor chipset is the world's first mobile chip equipped with two neural processing units, or NPUs. An NPU enables faster processing power and smarter image, facial, and voice recognition features. Until now, the industry's most advanced mobile chips, such as Apple's A11 core processor for the iPhone X, have had one NPU.
Huawei's new chipset is designed by the Chinese company's semiconductor arm, HiSilicon Technologies -- China's top chip designer by sales. It marks an advance to the 7-nanometer size, which allows more electronics to be packed into each device. Taiwan Semiconductor Manufacturing Co., the world's biggest contract chipmaker, employs advanced and costly 7-nm production technology and will supply Apple's A12 core processor for the new iPhones.
The Kirin 980 chipset will be used in Huawei's Mate 20 smartphone, its latest flagship and answer to the soon-to-be-announced iPhones. Apple is expected to unveil its new handsets on Sept. 12, while the newest Mate series device is scheduled to reach the market in the October-December quarter.
The artificial-intelligence-equipped Kirin 980 also enables the fastest data transfer speed in the industry, and can better handle data-heavy entertainment applications like gaming and augmented reality, according to Huawei.
"Last year, we showed the world the potential of On-Device AI with the Kirin 970, and this year, we've designed an all-around powerhouse that not only features outstanding AI capabilities, but also brings cutting-edge raw performance to consumers," Huawei's consumer electronics chief, Richard Yu, said in a news release.
Though suffering a number of setbacks -- most notably U.S. and Australian bans on government purchases of its equipment -- Huawei has become a formidable player in the tech industry, and now ranks as a global leader in telecommunications equipment.
Despite few gains in the U.S. market, Huawei overtook Apple to become the No. 2 smartphone brand by shipments in the April-June quarter, according to IDC Research. Much of this advance owes to its success in China.
Earlier this year, Yu pledged to overtake Samsung Electronics as the leading smartphone maker in two to three years, and to knock Apple from its perch by the end of 2018.
Huawei's secretive HiSilicon is known as an innovator in chip technology.
Last year, HiSilicon introduced Kirin 970, the world's first mobile processor with artificial intelligence. The chip went into Huawei's Mate 10 smartphone ahead of Apple's A11 Bionic processor for the iPhone 8 and iPhone X, both of which also feature AI functionality, such as image and facial recognition. Both of these chipsets have only one NPU.
HiSilicon mostly designs high-end chips for Huawei, including mobile processors, modems chips and networking processors. It also produces chips for surveillance cameras, smart TVs and other devices, according to Bernstein Research.
The company is growing fast, with revenue rising 21% to $4.71 billion in 2017 -- in the same league as U.S.-based Advanced Micro Devices and well above two other U.S. chipmakers, Xilinx and Marvell, according to research agency IC Insights.
HiSilicon trails Apple as TSMC's No. 2 customer, but has led Qualcomm, MediaTek and Nvidia in recent quarters, according to an executive in the industry.
The emerging chip powerhouse boasts more than 6,000 engineers, whose salaries can exceed those offered by Apple and Qualcomm, according to people familiar with the matter.
"We only benchmark chips from global leaders like Apple, Samsung and Qualcomm," a HiSilicon engineer told the Nikkei Asian Review. "Our goal is to design chips better than the front-runners, and cost is not a factor."
The executive said Huawei dangles lucrative pay packages to poach top talent, who are expected to contribute immediately. "These guys need to perform as soon as they are on board, otherwise they'll get fired quickly," a Huawei employee said.
"Working for Huawei is not easy," the employee added. "We have a strict review system, and our main priority is performance, efficiency and technological superiority. Only the best people last more than three years or so."
The company now finds itself in the middle of the tech cold war between Washington and Beijing. However, it has ramped up efforts to improve its technology after being flagged as a national security threat by the administration of U.S. President Donald Trump.
In late July, Huawei pledged to increase research and development spending to between $15 billion and $20 billion -- possibly more than that of Google parent Alphabet in 2017.
That year, Huawei invested 89.7 billion yuan ($13.1 billion) on R&D, accounting for nearly 15% of its total revenue of $92.5 billion.