Huawei is building a production line to make advanced semiconductors as part of a complex in Shenzhen, part of China’s efforts to wean itself off foreign technology, the Financial Times reported, citing people familiar with the matter.
In addition, the reporters published satellite images showing the rapid pace of construction of a new factory, which is set to begin in 2022. The facilities, details of which have not been previously reported, demonstrate Huawei’s ambitions to become a leader in semiconductor manufacturing and help China overcome the difficulties caused by US trade sanctions, which is expected to allow the country to continue developing cutting-edge technologies such as artificial intelligence.
«“Huawei has made an unprecedented effort to build out every part of the AI supply chain, from wafer manufacturing equipment to building AI models. We’ve never seen one company try to do it all at once,” said Dylan Patel, founder of semiconductor consultancy SemiAnalysis.
Image source: Financial Times
Huawei operates one of the sites that will make 7nm processors for smartphones and Huawei Ascend accelerators used in AI, according to people familiar with the matter. It is the company’s first attempt to manufacture advanced chips in-house.
The other two facilities, completed last year, are operated by semiconductor equipment maker SiCarrier and memory chip maker SwaySure. While Huawei has officially denied any connection to the companies, sources say the tech giant has helped them with investment, staffing and technology sharing, among other things. The companies are also said to receive financial support from the Shenzhen government.
Part of the SiCarrier complex in April 2022, 2023 and 2025
Huawei is involved in projects aimed at creating alternatives to technologies used by Nvidia, ASML, SK Hynix and TSMC. The company stepped up its work in this direction after the US imposed a series of restrictions in 2019 that effectively cut off the Chinese manufacturer from critical technologies. At the same time, Huawei’s work is part of a broader government effort to localize the production of critical components in the face of US export controls designed to curb the development of Chinese technology.
The facilities, which are under construction, are located near chip makers Pengxinwei and Shenzhen Pensun, which the U.S. government says are also linked to Huawei. Huawei has also invested in semiconductor factories in Shanghai, Ningbo, and Qingdao.
Some industry experts are skeptical about Huawei’s ability to realize its ambitions, given its relative inexperience in semiconductor manufacturing compared with both domestic and international competitors. “This is a massive project that has received massive government support. But there are competitors in China that have been working on the same thing for decades, but they can’t match ASML and TSMC,” said one industry investor, who asked to remain anonymous.
According to the source, Huawei supports SiCarrier and SwaySure in a variety of ways, including by sending management and technical staff to them, helping them find investment, and providing access to some technologies. The companies’ association with Huawei, in turn, gives sovereign wealth funds “confidence” to invest, the person said. This structure allows sovereign wealth funds to invest in Huawei’s chip manufacturing strategy without the company itself having to attract outside investment and dilute its shareholder base.
«These companies will be cut off from Huawei once they reach a certain stage of development. During this process, Huawei provides them with personnel, technology and systems. This helps speed up the iteration of technologies and increases their chances of success,” said a person familiar with the matter.
The report said SiCarrier was created from Huawei’s research lab with support from a Shenzhen state-owned fund. It was registered as a company in 2021. Western media outlets such as Bloomberg have previously reported on Huawei’s connection to SiCarrier. The company had largely flown under the radar during its existence, but that all changed when it unveiled about 30 tools, including etching and testing equipment, at the Semicon conference in Shanghai in March.
New Huawei facility in April 2021, 2022 and 2025
SiCarrier has several subsidiaries, including the Shanghai government-backed Yuliangsheng, which specializes in lithography technology. The company is led by former Huawei engineers and is developing deep ultraviolet (DUV) lithography equipment. SiCarrier does not officially disclose information about its activities in this area.
Another Huawei-linked company is SwaySure, which supplies memory chips for automobiles and consumer electronics. Huawei declined to disclose details about the factory under construction, once again stating that SiCarrier, SwaySure, and a number of other companies are not associated with it. SiCarrier and SwaySure declined to comment on the matter.
The third facility on the site is a Huawei factory, which will house production lines for creating chips for smartphones and Ascend accelerators. It will also develop components for the company’s automotive business. It is noted that the architectural structure is similar to other Huawei factories used to produce semiconductors. Construction of the factory should be completed in the coming months, but it will take at least a year before production begins, since Huawei intends to use mainly domestically produced equipment there.
According to the source, many of Huawei’s partners and competitors, including SMIC and Shanghai Micro Electronics Equipment, have been brought into the tech giant’s project to bring their own engineering expertise to the table. One insider noted that Huawei’s political influence means that companies are expected to help, even if that means helping a competitor.
It should also be noted that the activities of SiCarrier and SwaySure did not go unnoticed by the United States. In December, Washington imposed sanctions against them, prohibiting the supply of technology from American companies. The American authorities explained this decision by the fact that SiCarrier and SwaySure helped Huawei create advanced chips for the Chinese army.