China’s leading competitor in the chip industry has established a new research and development center in Shanghai amid pressure from U.S. sanctions intended to limit its technological advancements. The Huawei Lianqiu Lake R&D Center, with an investment exceeding 10 billion yuan ($1.4 billion), is expected to commence operations this year, as per a statement from the Qingpu district government. The center aims to facilitate major technological advancements in fields such as 5G, cloud computing, and artificial intelligence.
In January, the state-owned Securities Times announced that nearly 30,000 personnel will be involved in research and development activities related to chips, wireless networks, and the internet at this center. Huawei, which has been on the U.S. trade blacklist since 2019, has recently regained momentum in China with its Mate 60 Pro smartphone powered by the Kirin 9000s chip.
The Kirin 9000s chip, utilizing advanced 7-nanometer processing technology, represents a challenge to U.S. sanctions. It was manufactured by Semiconductor Manufacturing International Corp. (SMIC), China’s leading chipmaker. However, Bloomberg reported in March that SMIC used technology from U.S.-based companies Applied Materials Inc. and Lam Research Corp. These technologies were reportedly in SMIC’s possession before the U.S. prohibited American companies from supplying advanced chips and chipmaking equipment to Chinese firms in October 2022.
In April, U.S. Secretary of Commerce Gina Raimondo stated that Huawei’s smartphone chip was “not nearly as good” and “years behind” U.S. technology, suggesting that U.S. export controls are proving effective. Nonetheless, reports indicate that Huawei is struggling to boost production of its Ascend 910B chip, which is China’s best alternative to Nvidia’s chips now restricted from sale to Chinese customers, due to breakdowns in components of repurposed chip fabrication machines.