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Chinese telecoms equipment company is accused by the Semiconductor Industry Association (SIA) of building numerous new chip fabs in China under different company names in order to circumvent US sanctions
According to a report from Bloomberg, Huawei may be seeking to sidestep US sanctions by operating a network of semiconductor facilities under different company names.
U.S. Commerce Department added Huawei to its export control list back in 2019, with the company having been deemed a risk national security risk. As a result of this designation, US companies can now only sell products to Huawei if they are granted specific licences from the government.
Matters were made worse in late October, when President Joe Biden levied additional restrictions on chip technology exports,
Combined, the various sanctions in place have left Huawei largely cut off from accessing US semiconductor technology – a major blow to almost all of Huawei’s core business units, particularly smartphone manufacturing.
Huawei, meanwhile, maintains that they pose no security risk, arguing that they are simply caught in the middle of the geopolitical tug-of-war between China and the US.
Nonetheless, it launched its own semiconductor business last year, seeking to solve its chip supply issues through domestic production.
This move was largely in line with the policies set out by the Chinese government, which has made bolstering its domestic semiconductor research and production industries a major priority in recent years, seeking to remove the industry’s heavy reliance on US tech.
Indeed, these measures appear to be working for Huawei, with the company noting in recent months that they could soon return to the 5G smartphone business by procuring 5G chips domestically.
In fact, according to the SIA, Huawei has received around $30 billion in government subsidies to expand this new business. Using these funds, the SIA says Huawei has already acquired two chip-making facilities and is in the process of building three more.
By operating these businesses under new names – such as Fujian Jinhua Integrated Circuit Co. and Pengxinwei IC Manufacturing Co. (PXW), in the cases of the acquired plants – Huawei can potentially bypass at least some of the sanctions against them and retain access to key US technologies.
Naturally, such tactics are sure to draw the ire of the US government, who say they are monitoring the situation carefully.
“Given the severe restrictions placed on Huawei, Fujian Jinhua, PXW and others, it is no surprise that they have sought substantial state support to attempt to develop indigenous technologies,” a speaker from the Commerce Department’s Bureau of Industry and Security (BIS) told Bloomberg. “BIS is continually reviewing and updating its export controls based on the evolving threat environment and, as evidenced by the Oct. 7, 2022 rules, will not hesitate to take appropriate action to protect US national security.”
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