China’s Huawei plans to establish a chip factory in Shanghai to develop and produce its own chips. As Huawei has no experience in manufacturing chips, the factory will be operated by Huawei’s partner, the Shanghai R&D Center for Integrated Circuits, the Financial Times reported Nov. 1, citing sources with knowledge of the matter. According to Huawei’s plan, in the initial phase, the chip factory will initially test the production of low-end 45nm chips, and hopes to produce 28nm chips by the end of 2021, and 20nm chips by the end of 2022.
According to the Shanghai Integrated Circuit R&D Center website, the center, which was established in 2002, “is a state-level integrated circuit R&D center supported by the state and established through cooperation between industry, universities and research institutes, with joint investment from Chinese integrated circuit-related enterprise groups and universities. The Financial Times says that the center’s main shareholder is the state-owned enterprise Huahong Group. According to the group’s website, the Huahong Group is an 8+12-inch chip maker that currently owns the mainstream process technology for advanced chip manufacturing in China.
According to the plan, the chip plant will gradually meet Huawei’s demand for chips in businesses such as smart TVs, IoT devices and 5G telecom equipment. Its ultimate goal is to be able to secure component supplies for its core telecom infrastructure business without being affected by U.S. technology sanctions.
Observers believe that the project could help Huawei, which has no experience in chip manufacturing, solve its long-term survival problems. Huawei has reportedly been stockpiling imported semiconductors since last year in response to the U.S. sanctions. Chips are the collective term for semiconductor component products, also known as integrated circuits.
According to Chinese media reports, Huawei founder Ren Zhengfei said in September this year in a discussion with some scientists and student representatives: “Huawei today encountered difficulties, not relying on a global platform, in the strategic direction of the pressure on the heavy force to produce a breakthrough, and what is wrong, but our design of advanced chips, the domestic basic industry has not been built, we can not do products, and go manufacturing chips.”
However, the Financial Times quotes a semiconductor industry executive who heard about the plans: “The proposed new production line will not help the smartphone business, as chipsets for smartphones need to be produced at more advanced technology nodes.”
Huawei has been excluded from the construction of 5G networks by almost all Western countries for fear of threatening national security. The U.S. also imposed sanctions on Huawei, ZTE, Tencent, SMIC and other major companies, halting their chip supplies and banning them from using the widely used industrial design software EDA and all other products and services containing advanced U.S. technology, causing a “chip panic” among Chinese companies and a “chip panic” over the use of the new chipset in their products. “Technology stuck” anxiety.
On the other hand, Huawei’s internal assessment of self-built production line transformation has been rumored for a long time, in Huawei’s consumer business CEO Yu Chengdong publicly stated to be fully rooted in the semiconductor industry, Huawei internal rumors code-named “Tower Hill Plan” self-built production line planning, began to be mentioned on the table, has become the focus of industry debate.
Industry experts have said that Huawei since last year, after the stockpile of imported chips exhausted, the proposed local plant may become a new source of supply for the company’s semiconductors.
Now the media reported the news of Huawei’s proposed chip production plant is believed to be the original out of Huawei internal “Tower Hill program.
Huawei Chairman-in-Office Guo Ping said in public in September this year, Huawei has strong skills in chip design, they are very pleased to assist a reliable supply chain to develop its capabilities in chip manufacturing, equipment and materials.
According to the Financial Times, both Huawei and the Shanghai Integrated Circuit Research and Development Center declined to comment on rumors related to the construction of the plant.
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