One of China’s key competitors in the chip industry has established a research and development center in Shanghai, in response to U.S. sanctions aimed at hindering its advanced tech advancements.
The Huawei LianqiuLake R&D Center, set to commence operations this year, involves an investment exceeding 10 billion yuan (approximately $1.4 billion), according to a statement by the Qingpu district government. This center aims to facilitate the Chinese tech giant in making significant strides in critical technological domains such as 5G, cloud computing, and artificial intelligence.
In January, the state-owned Securities Times reported that nearly 30,000 personnel would be engaged in the R&D activities of chips, wireless networks, and the internet at the center.
Huawei has been on the U.S. trade blacklist since 2019, with special licenses for U.S. chipmakers Intel and Qualcomm to sell to blacklisted Chinese firms being revoked in May. Despite this, Huawei has seen a revival in China, driven by its Mate 60 Pro smartphone, equipped with a Kirin 9000s chip.
This chip, employing advanced 7-nanometer processing technology, marks a setback for U.S. sanction efforts and was produced by China’s leading chipmaker, Semiconductor Manufacturing International Corp. (SMIC). However, Bloomberg reported in March that the companies used technology from U.S.-based Applied Materials Inc. and Lam Research Corp. for chip production. SMIC had obtained U.S. technology before American companies were prohibited from supplying advanced chips and equipment to Chinese firms 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,” suggesting that U.S. export controls are effective.
Meanwhile, Huawei is reportedly struggling to ramp up production of its Ascend 910B chip, China’s closest competitor to Nvidia’s chips, which are barred from sale to Chinese customers, due to breakdowns in components from repurposed chip fabrication machines.