Behind The Scenes, Huawei Reportedly Becomes Central Player In China's Chip War Strategy

In the ongoing worldwide semiconductor dispute, the Chinese government is surreptitiously transforming Huawei Technologies Co. into a significant player to create an independent chip environment.

What Happened: A recent Bloomberg report reveals Huawei’s expanded role in China’s chip industry. Not only is Huawei the principal chip designer and primary client for chip manufacturers, but it also offers technical know-how and financial support to smaller firms in the chip supply chain. 

However, Huawei’s involvement often goes undisclosed to avoid potential U.S. restrictions.

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The extent of state backing for Huawei is unparalleled. 

Bloomberg uncovered a network of companies aided by an investment fund from the Shenzhen city government. The fund aims to assist Huawei in building a self-sufficient chip network involving optical specialists, chip equipment developers, and chemical manufacturers. 

This is on top of a $30 billion state-run initiative to support Huawei’s chip fabrication facilities construction.

Kendra Schaefer, a partner at Beijing-based consultancy Trivium China, said, “Huawei is now the centerpoint. The export controls have pushed the state and industry together in a way we haven’t seen before.”

Despite these revelations, Huawei has refuted claims of receiving government assistance for semiconductor technology development.

 Sources wishing to remain anonymous stated that the decision to place Huawei at the forefront of China’s chip industry self-sufficiency efforts came directly from the government’s upper echelons.

Why It Matters: This development is noteworthy in the context of the global race for semiconductor self-reliance. 

Earlier this week, Jensen Huang, CEO of NVIDIA Corporation NVDA, projected that it could take the U.S. up to 20 years to gain independence from foreign chip manufacturing. 

As countries vie for chip independence, the role of companies like Huawei in this strategic endeavor is becoming increasingly important.

Photo Courtesy: Shutterstock.com

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