Huawei builds secret chip network across China

According to Bloomberg, the above information was released by the Semiconductor Industry Association (USA) on August 22. This association said that Huawei has switched to chip manufacturing in 2022 and is receiving about 30 billion USD in state funding. Huawei has acquired at least two factories and is building three more.

The US Commerce Department added Huawei to its export control list in 2019 over security concerns. The company denies it is a security risk.

If Huawei is building facilities under the names of other companies, the group could avoid the bans and indirectly purchase US chipmaking equipment.

Huawei and the Semiconductor Industry Association did not respond to Reuters requests for comment.

Huawei has been placed on a trade blacklist in the United States. Most suppliers are banned from selling goods and technology to the company unless they have a license. US officials continue to tighten controls to block Huawei from buying or designing the semiconductor chips that power most of the company’s products.

In March, Huawei founder Ren Zhengfei said in a speech that the company had replaced more than 13,000 parts in products affected by US trade sanctions. Huawei also redesigned 4,000 circuit boards for its products. He said circuit board production had stabilized.

Since 2019, the US has imposed a series of export controls on Huawei, a major supplier of equipment used in 5G telecommunications networks. These measures have cut off US companies’ supply of chips to Huawei and blocked the company from accessing US technology to design chips for its manufacturing partners. In 2022, the Biden administration banned the sale of new Huawei equipment in the US.

Ren Zhengfei said Huawei invested $23.8 billion in research and development in 2022 and will increase investment in this area due to improved profits.

Earlier, on January 31, China protested against the US plan to impose a complete ban on US technology exports to Huawei. Chinese Foreign Ministry spokesman Mao Ning accused the US of obstructing Huawei by expanding the concept of national security, saying the plan was an act of technological monopoly.

Due to the bans, Huawei's operating profit in 2022 decreased significantly compared to the previous year. In 2022, the group recorded a net profit of 5.2 billion USD, down 68.7% compared to the same period in 2020.

However, in the first half of 2023, Huawei recorded revenue of $42.96 billion, up 3.1% year-on-year with a net profit margin of 15%.

Huawei was once one of the world's largest suppliers of telecommunications network equipment and one of the top three smartphone makers, behind only Apple and Samsung.

Huawei's struggles have forced the group to diversify its businesses, shifting its focus to enterprise computing services, smartwatches, medical technology, smart vehicle technology and software.

According to Tin Tuc Newspaper