Chinese giant Huawei is reportedly quietly raising investment in semiconductor specialists. The strategic move was taken to shore up its defenses to face the US restrictions that have been going on since 2019.
Japan's leading media outlet Nikkei Asia found the investment arm of the Chinese tech giant, including Hubble Technology Investment, took or increased stakes in more than 45 domestic tech companies by 2021, a more than doubled increase compared to 2020.
The news site reports that around 70 percent of investment in 2021 will be in semiconductor-related suppliers, including chip developers, design tools, production equipment, and materials.
Huawei seems particularly interested in building chip packaging capabilities, which refers to the final step in semiconductor manufacturing. Nikkei Asia noted that US companies are less familiar with the relevant technology in the field than manufacturing processes.
In one example, Huawei is said to have recently partnered with Quliang Electronics, a supplier of packaging and testing chips based in Fujian Province.
Sources told Nikkei Asia that Quliang Electronics is rapidly expanding its production capacity in Quanzhou to help Huawei put its chip assembly designs into production and pilot chip stacking and packaging technology.
Nikkei Asia also pointed to the recent establishment of Huawei Precision Manufacturing in Shenzhen to leverage electronics manufacturing.
Huawei is busy recruiting experts from suppliers, including Taiwan's ASE Technology Holding, a chip packaging and testing services provider, and forging partnerships with local players, including collaboration with BOE Technology Group to develop panel-level chip packaging technologies.
Huawei's rotating chairman Guo Ping recently acknowledged that 2022 would present a "fair challenge" and noted that "only through strategic investments can we grow stronger and build a future for ourselves."
As is known, the chips for Huawei devices are produced by the Taiwanese company TSMC. But when US rules were introduced, TSMC could no longer manufacture semiconductors for Huawei. The restrictions have crippled Huawei's smartphone business globally.
In addition to Huawei, China's leading chip vendor, SMIC (Semiconductor Manufacturing International Corporation) is also on a US blacklist that restricts its access to American technology. These sanctions could concern Chinese companies now developing their chips.
On the other hand, Huawei's efforts to develop capabilities in the semiconductor industry have raised Taiwan against China.
On Thursday (2/17/2022), Taipei passed a draft revision of the island's national security law. The new law also includes the "crime of economic espionage."
The rules are designed to address potential threats from China to steal key technology, as well as high-caliber professionals. Violators of the rules face up to 12 years in prison.