Huawei reportedly building secret fab network

Business news | August 24, 2023

By Peter Clarke

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Huawei is building up a series of wafer fabs under different names to avoid US sanctions the Semiconductor Industry Association has reportedly told Bloomberg News.

Bloomberg reported the SIA saying that Huawei has acquired at least two existing chip plants and is building three others.

The Chinese telecommunications giant was targeted by US export controls back in 2019 and without access to leading-edge manufacturing from TSMC quickly lost its leading position in smartphones. Recently there have been rumors coming out of China that it is planning to re-enter the market although observers questioned from where it would get competitive technology (see Huawei plans to use SMIC’s ‘nearly-7nm’ process).

There were also hints that Huawei was looking for alternative sources of manufacturing (see Report: Huawei, Shenzhen support creation of local foundry).

However, the scale of Huawei’s ambition was not clear. But according to the SIA as reported by Bloomberg, it received an estimated US$30billion in funding from the Chinese government to speed its move into chip production in 2022.

One of the wafer fabs is Pengxinwei IC Manufacturing Co. Ltd., known as PXW, run by a former Huawei executive in Shenzhen’s home city of Shenzhen.

Also in Shenzhen with plans to build a wafer fab is PengXinXu Technology (PXX) and memory chip startup SwaySure Technology Co. Ltd. founded in March 2022 (see Shenzhen recruits former Elpida CEO to kickstart DRAM startup).

It is thought all three of these wafer fabs are either wholly- or majority owned by the Shenzhen local authority.