The Association of World-Class Microchip Manufacturers stated that Huawei Technologies Co. is building a network of secret production facilities in China for the production of semiconductors. This “shadow” production will enable the company to bypass US sanctions and further China’s technological ambitions.(source)
Huawei, amidst tensions between the United States and China, shifted its focus to chip production last year. According to the Semiconductor Industry Association headquartered in Washington, the company is receiving funding of approximately $30 billion from the state and the city of Shenzhen. Huawei has acquired at least two plants and is constructing at least three more.
The US Department of Commerce blacklisted Huawei in 2019, but concerns remain that the company may acquire and construct facilities under different names to bypass restrictions. This tactic would allow Huawei to indirectly purchase American equipment for microchip production.
The US Department of Commerce’s Bureau of Industry and Security has responded to the Association’s warning, stating that it will monitor the situation and take necessary actions as required.
China is planning to invest over $100 billion in the semiconductor industry by 2030 and intends to construct at least 23 plants. By 2029-2030, China is expected to control over 50% of the global production capacity of older generations of microchips.
It is important to note that the US administration introduced export control measures last October, restricting Chinese companies’ ability to acquire advanced semiconductors and production equipment.
The situation with Huawei has raised concerns about the necessity for stricter export control by the United States. Meanwhile, Beijing has expressed strong opposition to American export control measures and has announced its intention to develop alternative technological solutions.