Huawei’s Hidden Semiconductor Factories Raise Trade Concerns

Huawei is constructing a covert network of semiconductor-fabrication facilities across China, according to the Washington-based Semiconductor Industry Association (SIA).

As reported by Bloomberg, this hidden manufacturing ecosystem could enable the blacklisted tech company to evade US sanctions and further its technological ambitions.

In a recent disclosure, the SIA has revealed concerns about Huawei’s expansion into chip production.

The company is allegedly receiving approximately $30 billion in state funding from the Chinese government and its home base in Shenzhen, while actively pursuing chip production.

It’s said to have acquired two existing plants and is currently building three more facilities, as per SIA’s presentation.

Since being placed on the US Commerce Department’s entity list in 2019, Huawei has faced stringent restrictions in collaborating with American companies.

However, if the company is indeed developing semiconductor facilities under the guise of other entities, it might exploit this secrecy to indirectly procure US chipmaking equipment.

The Bureau of Industry and Security, under the Commerce Department, is monitoring the situation in response to SIA’s concerns.

The department has already blacklisted multiple Chinese companies, including those purportedly connected to Huawei’s network.

While export controls have been imposed on Chinese companies, including Huawei, preventing them from acquiring advanced semiconductor technology, the exact scope of Huawei’s actions remains ambiguous.

The recent actions of the Biden administration, which levied export controls last year, further limit Chinese companies from acquiring advanced semiconductors and related equipment.

While older-generation chipmaking equipment is still accessible to Chinese companies, restrictions have escalated for companies like Huawei.