According to Bloomberg News, Huawei is developing a self-sufficient chip ecosystem with active help from the Chinese government. According to research by Bloomberg News, the Shenzhen government established an investment fund with the sole purpose of using Huawei as the central point of a large network that includes optical experts, chip equipment developers and chemical manufacturers.
Two sources said the decision to make Huawei the dominant force came directly from high-level government officials. In response to U.S. Commerce Secretary Gina Raimondo’s visit to China, the government even asked manufacturers to launch Mate60 in advance.
Huawei Mate60 smartphone uses the 7nm chip Kirin 9000S made in China. Industry insiders say the 7-nanometer chipsets made by Semiconductor Manufacturing International Corp. show China is about five years behind the current state of the art, while U.S. export controls are designed to put China at least eight years behind.
The main reason why Huawei and China's entire chip business are targeted by the United States is that the United States is concerned that American technology obtained by Chinese manufacturers may be used in chips like the 9000S to power artificial intelligence-controlled drones, supercomputers used for code-breaking and surveillance.
Shenzhen Major Industrial Investment Group was established in 2019 with state funding and was directly mandated to support China's chip work. Data from the company registration information public platform show that the group has invested in about a dozen companies in the supply chain. Bloomberg found that a chip manufacturing tool company called SiCarrier (Shenzhen Xinkailai Technology Co., Ltd.) formed a "close symbiotic relationship" with Huawei, and the two parties conducted talent exchanges.
SiCarrier is using Huawei engineers on the project, while the chipmaker transferred more than a dozen patents, including electronic machinery and data center design technology. Neither side responded to Bloomberg News' requests for comment. One SiCarrier factory produces components for semiconductor manufacturing equipment, including laser-driven light source gears, pressure control valves and pumps.
In addition, another company, Zetop Technologies (Changguang Jizhi Optical Technology Co., Ltd.), has also attracted Bloomberg's attention. The company produces optical machines that can install transistors layer by layer on silicon wafers. Huawei is the company's major shareholder, and the Institute of Optics, Fine Mechanics and Physics under the Chinese Academy of Sciences is also a shareholder of the company.
ASML Holding is a Dutch company that has almost a monopoly on the sales of lithography machines, but does not sell its cutting-edge products to Chinese companies. However, Huawei and its partners managed to hire some former ASML employees to help them develop chip manufacturing equipment.
Analysts revealed that China has not only set up funds to build chip manufacturing facilities worth US$30 billion. The state also helped provide land, waived income taxes and even built apartment buildings for employee campuses. China's goal is not to establish complete self-sufficiency. It focuses only on creating domestic alternatives in areas where the United States and allies can cut off supply, such as photolithography, wafer production and electronic design information.