One of China’s principal competitors in the chip industry has established a research and development center for semiconductor technology in Shanghai, amidst mounting pressure from U.S. sanctions aimed at limiting its advancements in technology.
The Huawei LianqiuLake R&D Center is slated to commence operations this year, following an investment of over 10 billion yuan, or $1.4 billion, as reported by the Qingpu district government. The center aims to advance Huawei’s breakthroughs in critical areas like 5G, cloud computing, and artificial intelligence.
In January, the state-owned Securities Times noted that nearly 30,000 personnel would be involved in research and development activities related to chips, wireless networks, and the internet at the new facility.
Huawei has been on the U.S. trade blacklist since 2019. In May, special licenses that allowed U.S. chipmakers, including Intel and Qualcomm, to sell to blacklisted Chinese firms were revoked. Despite this, Huawei has seen a resurgence in China, particularly due to its Mate 60 Pro smartphone, which features the Kirin 9000s chip.
The Kirin 9000s chip utilizes advanced 7-nanometer processing technology, representing a challenge to U.S. sanctions. It was manufactured by China’s leading chipmaker, Semiconductor Manufacturing International Corp. (SMIC). However, Bloomberg reported in March that U.S. technology from Applied Materials Inc. and Lam Research Corp. was used in the chip’s production, technology that SMIC acquired before the U.S. embargo on supplying China with advanced chipmaking equipment came into effect in October 2022.
In April, U.S. Secretary of Commerce Gina Raimondo commented that Huawei’s smartphone chip “is not nearly as good” and is “years behind what we have in the United States,” indicating that U.S. export controls are impactful.
However, Huawei is reportedly struggling to scale up production of its Ascend 910B chip, China’s closest alternative to Nvidia’s chips, which are restricted from sale to Chinese customers. The production issues are linked to components in repurposed chip fabrication machines breaking down.