By Che Pan, Eduardo Baptista and Casey Hall

SHANGHAI/BEIJING, May 25 (Reuters) - Huawei Technologies said on Monday it plans to produce leading semiconductor chips using new technology within five years, a move that highlights Beijing's efforts to reduce the impact of U.S. sanctions that have hampered its ability to produce advanced chips.

Huawei explained during a semiconductor forum in Shanghai that its advanced chips will reach a transistor density equivalent to 1.4-nanometer manufacturing technologies by 2031, but it did not provide independent data on the performance of these chips.

The nanometer is a scale that reflects how precisely the components of electronic chips, namely transistors, are miniaturized. The smaller it is, the more advanced the technology and the more efficient the chip performance.

This goal is of particular importance, as China's current chip manufacturing capabilities are considered to be around seven nanometers, while 1.4-nanometer technologies are expected to represent the pinnacle of global development in this field by the end of the decade.

It is widely believed that China may not be able to reach this level through traditional manufacturing methods alone, due to restrictions imposed by Washington on its access to advanced photolithography tools and other key technologies in the semiconductor industry.

In contrast, Taiwan Semiconductor Manufacturing Company Limited, the world’s largest producer of advanced chips, currently uses two-nanometer manufacturing technology and plans to bring its 1.4-nanometer technology into mass production by 2028.

Huawei today revealed a new principle for improving chip performance, noting that the industry can no longer rely primarily on miniaturizing transistors to achieve leaps in computing power, known as Moore's Law, as transistors have become so small that their dimensions are measured in just a few atoms.

Huawei said the new principle, called "Tao's Law of Measurement," focuses on reducing the time it takes for signals and data to travel across chips and computing systems. If successful, this principle could provide the company with a way to improve performance and chip density despite restrictions on China's access to the latest semiconductor equipment.

The company said it has designed and produced 381 chips over the past six years based on the Law of Tao for use in industries including smartphones and artificial intelligence computing.

Huawei’s achievements in the field of semiconductors are becoming increasingly important, as leading technologies are becoming a key pillar of China’s future economic development and geopolitical influence.

Huawei was placed on the US trade blacklist in 2019, depriving it of a number of US technologies, including chips and software, and restricting its ability to rely on global chipmakers.

Huawei’s latest chip design strategy is seen as evidence that the company and its Chinese partners have made progress despite US restrictions, but analysts say Beijing still lags behind global leaders in more advanced processing technology.

This also follows Huawei's release in October of a long-term roadmap for the development of its AI chips, including the Ascend series.

Demand for Ascend chips has surged in China this year, as local technology companies seek alternatives to products from US firm Nvidia, whose most advanced AI processors are banned from sale in China.

Nvidia CEO Jensen Huang said earlier this month that the company had "largely given up" the artificial intelligence chip market in China to Huawei.