Huawei Reportedly Building 'secret' Semiconductor Fabs

Huawei is building a network of secret semiconductor fabs in China, according to recent media reports. Or maybe it isn't.

The Semiconductor Industry Association reportedly informed its members that Huawei has acquired two existing plants and is building three more. It has also received some $30 billion in government subsidies to help. The move into chip fabrication makes sense for Huawei, given its difficulty selling networking gear and its government's desire to build more chips at home.

According to Bloomberg, though, the fabs would enable "a shadow manufacturing network that would let the blacklisted company skirt US sanctions and further the nation's technology ambitions."

Huawei has allegedly been tight-lipped about the endeavor – lending the whole affair a cloak-and-dagger air.

• China cooks covert chips, recruits global geeks to dodge US restrictions
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• US sanctions cut Huawei profits by half in first quarter
• Mega patent holder Huawei said to be putting licensing squeeze on SMEs

Bloomberg's reporting is largely based on a member-only presentation given by the Semiconductor Industry Association (SIA). The Register contacted SIA to receive further details but the mainstay trade and lobbying group did not respond.

The day after the Bloomberg report, however, SIA released a statement stating its report merely summarized trends from publicly available information and focused on a set of widely reported developments.

"The news story in question included several inaccuracies. SIA, for example, did not issue any warnings or sound any alarms," downplayed the org.

Huawei entered the US Commerce Department's entity list in 2019 over concerns that unidentified foreign adversaries could exploit vulnerabilities in IT and telecom systems and services.

Since then, many governments have jumped on or considered jumping on the Huawei ban-wagon. For instance, in June, the EU was mulling over a mandatory ban on member states using kit from manufacturers deemed to be a possible security threat in their telecoms networks.

The measure has had a considerable effect on the Chinese tech concern. Its profits dropped 46 percent percent in the first quarter of 2023.

The Bureau of Industry and Security reportedly told Bloomberg it is monitoring the situation but is not surprised if Huawei is seeking state support, given the severe restrictions placed on its activities. ®