Bloomberg: China pours billions into Huawei to make it a chip mogul

Huawei is developing a self-sufficient chip network with the active help of the Chinese state, Bloomberg News reports. According to the publication's research, a city government investment fund in Shenzhen has been founded for the sole purpose of putting Huawei as the centerpoint of a big network with optical specialists, chip equipment developers and chemical manufacturers.

The decision to make Huawei the leading force came with a direct order from the top of government, said two sources. The state even asked the manufacturer to launch Mate 60 earlier than previously planned as a response to the visit of US Commerce Secretary Gina Raimondo to China.

The Huawei Mate 60 smartphones feature a China-made 7nm chipset Kirin 9000S. We have sent multiple inquiries to Huawei representatives about the SoC, but they declined to comment every time. Insiders said the 7nm chipset, built by SMIC, reveals that China is roughly five years behind the current most advanced technology.

Export controls by the United States aimed to keep China behind at least eight years. The major reason why Huawei and the whole chip business in China is being targeted by the United States is concerns that US technology acquired by Chinese makers could be applied in chips like the 9000S to power AI-controlled drones, supercomputers for code-breaking and surveillance.

The Shenzhen Major Industry Investment Group was created in 2019 with state funding and received direct orders to support China's chip efforts. It has invested in about a dozen companies in the supply chain, revealed data from a public platform about company registration information. Bloomberg found one chipmaking tool company called SiCarrier, which formed a “close symbiotic relationship” with Huawei, and both sides exchanged talent.

SiCarrier is using engineers to work under the Huawei project, while the chip manufacturer transferred a dozen patents, including technologies for electronic machines and data center designs. Both sides didn't respond to requests for comment to Bloomberg News.

One facility of SiCarrier makes components for semiconductor manufacturing equipment, including laser-driven light source gears, pressure control valves, and pumps, according to an evacuation map on a wall.

There is also Zetop Technologies, a company that makes optical machines that put layer after layer of transistors on a silicon wafer, and Huawei is a major shareholder, along with the Institute of Optics, Fine Mechanics, and Physics, an affiliate of the Chinese Academy of Sciences.

ASML Holding, a Dutch company that practically holds a monopoly over the sales of lithography machines, is not selling its products to Chinese companies. However, Huawei and its partners managed to hire a number of former ASML employees to help work on chipmaking machines.

Analysts revealed China is not only setting up funds and building $30 billion chip fabrication facilities. The state also helps with land, requires no income tax, and even builds apartment buildings for employee campuses. The country doesn't aim to establish full self-sufficiency. It works only on creating domestic alternatives in fields where the US and allies can choke off supplies, like lithography, wafer production, and electronic design information.

Source
Image source: ASML