One of China’s leading players in the chip industry has established a research and development center for chips in Shanghai amid increasing pressure from U.S. sanctions designed to halt its progress in advanced technology.
The Huawei Lianqiu Lake R&D Center is set to begin operations this year with an investment exceeding 10 billion yuan, equivalent to $1.4 billion, as announced by the Qingpu district government. The announcement noted that the center will facilitate significant advancements for the Chinese tech giant in essential technological domains such as 5G, cloud computing, and artificial intelligence.
State-owned Securities Times reported in January that the center will employ nearly 30,000 personnel focused on research and development of chips, wireless networks, and the internet.
Huawei has been on the U.S. trade blacklist since 2019. In May, special licenses allowing U.S. chipmakers Intel and Qualcomm to sell to blacklisted Chinese chip firms were revoked. Nevertheless, Huawei has seen a resurgence in China thanks to its Mate 60 Pro smartphone, powered by the Kirin 9000s chip.
The Kirin 9000s chip, utilizing advanced 7-nanometer processing technology, represents a setback for U.S. sanctions. It was produced by China’s leading chipmaker, Semiconductor Manufacturing International Corp. (SMIC). However, Bloomberg reported in March that the companies had used technology from U.S.-based firms Applied Materials Inc. and Lam Research Corp. to manufacture the chips. SMIC reportedly obtained the U.S.-made technology before restrictions were imposed on supplying Chinese companies with advanced chips and chipmaking equipment in October 2022.
In April, U.S. Secretary of Commerce Gina Raimondo remarked that Huawei’s smartphone chip is “not nearly as good” and “years behind what we have in the United States,” indicating that U.S. export controls are having the desired impact.
Meanwhile, Huawei is reportedly struggling to increase production of its Ascend 910B chip — China’s prime alternative to Nvidia’s chips, which are prohibited from being sold to Chinese customers — due to the breakdown of components in repurposed chip fabrication machines.