Home » Huawei Accused of Building Secret Microchip Factories to Beat US Sanctions

Huawei Accused of Building Secret Microchip Factories to Beat US Sanctions

US-based semiconductor association claims Chinese tech firm has acquired at least two plants and is constructing three others.

Huawei has been accused by a leading association of semiconductor manufacturers of building a collection of secret chip-making facilities across China to help the technology company bypass US sanctions, according to a report.

The Chinese tech firm moved into chip production last year and was receiving an estimated $30bn (£23.7bn) in state funding from the government, the Washington-based Semiconductor Industry Association was quoted as saying by Bloomberg, adding that Huawei had acquired at least two existing plants and was building three others.

The US commerce department had added Huawei to its export control list in 2019 over security concerns. The company denies being a security risk.

If Huawei is constructing facilities under names of other companies, as the Semiconductor Industry Association alleges, then it may be able to circumvent US government restrictions to indirectly purchase American chip-making equipment, according to Bloomberg.

The Semiconductor Industry Association and Huawei did not immediately respond to requests for comment.

Huawei has been placed on a trade list in the US that restricts most suppliers from shipping goods and technology to the company unless they have been granted licences.

Officials have continued to tighten the controls to cut off Huawei’s ability to buy or design the semiconductor chips that power most of its products.

In 2019 the Trump administration declared a national economic emergency empowering the US government to ban the technology and services of “foreign adversaries” deemed to pose “unacceptable risks” to national security. Huawei was not named in the order, but it came after months of pressure from the US on the company.

In a rare example of bipartisan agreement, the Biden administration has continued its tough stance on China and its tech influence. At the start of the month, Joe Biden signed an executive order prohibiting certain US investments in sensitive technology in China and requiring government notification of funding in other tech sectors.

The order prohibits or restricts certain US investments in Chinese entities in three sectors: semiconductors and microelectronics, quantum information technologies, and certain artificial intelligence systems.

In a letter to Congress, Biden said he was declaring a national emergency to deal with the threat of advancement by countries such as China “in sensitive technologies and products critical to the military, intelligence, surveillance, or cyber-enabled capabilities”.

Last August, Biden signed the Chips Act, a $50bn (£39bn) investment programme that aims to “boost American semiconductor research, development, and production, ensuring US leadership in the technology that forms the foundation of everything from automobiles to household appliances to defense systems”.

The US produces about 10% of global microchip production “and none of the most advanced chips. Instead, we rely on east Asia for 75% of global production,” the White House noted in a briefing paper.


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