According to the Semiconductor Industry Association, Huawei Technologies, the Chinese telecom company that has been targeted with sanctions by many Western countries, is attempting to develop “a collection of secret semiconductor-fabrication facilities across China,” reports Bloomberg’s Ian King and Debby Wu. They write:
The leading association of global chip companies is warning that Huawei Technologies Co. is building a collection of secret semiconductor-fabrication facilities across China, a shadow manufacturing network that would let the blacklisted company skirt US sanctions and further the nation’s technology ambitions.
Huawei, a controversial telecommunications gear maker at the heart of US-China tensions, moved into chip production last year and is receiving an estimated $30 billion in state funding from the government and its home town of Shenzhen, according to the Washington-based Semiconductor Industry Association. It’s acquired at least two existing plants and is building at least three others, the group said in a presentation to its members seen by Bloomberg.
The US Commerce Department put Huawei on its entity list in 2019, eventually prohibiting it from working with American companies in almost all circumstances. But if Huawei is constructing and buying facilities under the names of other companies without disclosing its involvement, as the SIA said, the telecom giant may be able to circumvent those restrictions to indirectly purchase American chipmaking equipment and other supplies that would otherwise be prohibited.
The Commerce Department’s Bureau of Industry and Security, in response to questions from Bloomberg News about the SIA warnings, which haven’t been previously reported, said it’s monitoring the situation and is ready to take action if necessary. It has already blacklisted dozens of Chinese companies beyond Huawei, including two the SIA says are part of Huawei’s network — Fujian Jinhua Integrated Circuit Co. and Pengxinwei IC Manufacturing Co., or PXW.
“Given the severe restrictions placed on Huawei, Fujian Jinhua, PXW and others, it is no surprise that they have sought substantial state support to attempt to develop indigenous technologies,” BIS said in a statement to Bloomberg. “BIS is continually reviewing and updating its export controls based on the evolving threat environment and, as evidenced by the Oct. 7, 2022 rules, will not hesitate to take appropriate action to protect US national security.”
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