China’s Billion-Dollar Investment in Huawei: Will it Make the Company a Chip Mogul? Bloomberg Reports

Huawei to Expand Chip Network with State Support

According to Bloomberg News, Huawei is working with the Chinese government to develop a self-sufficient chip network. A city government investment fund in Shenzhen has been established to support this initiative. The goal is to make Huawei the focal point of a large network that includes optical specialists, chip equipment developers, and chemical manufacturers.

The decision to prioritize Huawei reportedly came directly from the top of the Chinese government. The state even requested that the manufacturer launch its Mate 60 smartphone earlier than planned, in response to a visit from US Commerce Secretary Gina Raimondo to China.

The Mate 60 features a China-made 7nm Kirin 9000S chipset. However, it has been reported that this chipset, built by SMIC, lags behind the most advanced technology by about five years.

The United States has imposed export controls to restrict China’s technological advancement, with particular concern about Chinese technology being used in AI-controlled drones, supercomputers, and surveillance systems.

The Shenzhen Major Industry Investment Group, which was created in 2019 with state funding, has been tasked with supporting China’s chip efforts. The group has invested in multiple companies in the chip supply chain, with a focus on fostering symbiotic relationships among industry players.

One of the companies involved in this effort is SiCarrier, which has a close working relationship with Huawei. SiCarrier, which manufactures components for semiconductor equipment, has been collaborating with Huawei on various technologies. Another company, Zetop Technologies, is also working with Huawei to develop optical machines.

China’s goal is to establish domestic alternatives in fields where the US and its allies can restrict the supply, such as lithography, wafer production, and electronic design information.

As part of this initiative, the Chinese government is providing support in the form of land, tax incentives, and even housing for employee campuses. The ultimate aim is to reduce dependency on foreign technology and establish self-sufficiency in the chip industry.

Through this state-funded collaboration, Huawei aims to strengthen its position in the global semiconductor market, despite challenges posed by export controls and restrictions from the United States.

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