SHANGHAI (Reuters) - Huawei's new Mate 70 smartphone contains a chip whose design shows only an "incremental improvement" over its predecessor and, contrary to some expectations, was made using the 7 nanometer (nm) process node, consultancy TechInsights said on Wednesday.

The consultancy said a teardown it conducted of the Mate 70 Pro+ found that it contains a Kirin 9020 processor that was fabricated by Chinese chip foundry Semiconductor Manufacturing International Corporation (SMIC), similar to the Kirin 9010 processor in Huawei's breakthrough Mate 60 Pro.

The lack of major changes ran counter to rumours that the phone would contain a chipset made on a more advanced 5nm process, Techinsights added.

"The Kirin 9020 processor is not a dramatic redesign but rather an incremental improvement over its predecessor, the Kirin 9010," it said.

"This approach suggests HiSilicon's focus on refining its existing designs while leveraging SMIC's capabilities in advanced semiconductor manufacturing," it said. HiSilicon is Huawei's chip unit.

The findings suggest that Huawei may be finding it difficult to achieve new breakthroughs in chip manufacturing after it shocked the industry last year by releasing the Mate 60 that contained an advanced chip, defying years of U.S. sanctions.

TechInsights last year said it believed SMIC had managed to produce 7 nm chips by tweaking deep ultraviolet lithography machines it could still purchase freely from Netherlands manufacturer ASML.

But SMIC has been limited by a lack of more advanced lithography equipment, which has constrained its ability to make significant improvements in terms of chip performance and yields, Reuters has reported.

Since 2020, the U.S. has barred China from obtaining extreme ultraviolet lithography (EUV) technology from ASML, used to make the world's most sophisticated processors.

TechInsights said its teardown found notable changes in the circuit floor plan of the Kirin 9020 that aim to enhance performance and efficiency while maintaining compatibility with SMIC's 7nm process. The die of the Kirin 9020 was also 15% larger versus the Kirin 9010, it said.

A Huawei executive said last week they were seeing strong demand for the Mate 70 and were working hard to catch up with orders.

However, analysts have said consumer excitement for the phone has waned versus the Mate 60 and predict sales will be weaker for the new phone.