A trade group has claimed that Huawei is building a secret network of microchip plants which could allow the company to bypass US sanctions.
According to reports, the Chinese technology giant received up to $30bn £23.7bn), from the Beijing government for building local plants. This comes during a deepening of a trade war between US President Joe Biden.
Huawei, one of China’s largest tech companies, is under US sanctions, since 2019. White House officials have deemed Huawei’s equipment to be a spying threat.
The company is now focusing on chip production, and the estimated $30bn state investment will help to boost the business.
China is reportedly supporting Huawei’s high tech capabilities despite the sanctions, as it looks to become independent in semiconductors.
In a recent presentation, the Semiconductor Industry Association in Washington DC said that Huawei had acquired two chipmaking factories and was building three more.
According to reports, the plants are being run by companies without Huawei’s branding or name. This creates an opaque supply chain which could hinder US efforts to block exports to sanctioned firms of chipmaking equipment.
Huawei’s spokesperson declined to comment.
Huawei is now prohibited from doing business in the US by most companies.
The company is at heart of the US/China trade war, after President Biden prioritized restrictions on China’s technology sector in order to make it more difficult for domestic companies to buy the most advanced semiconductors.
The US blocked the sale of the manufacturing technology that is used to create artificial intelligence microchips in October over the claim they could be used for military purposes.
Chinese companies can continue to buy less-advanced technology for chip factories, even though sales to Huawei requires export licences which are rarely granted by US officials.
Huawei, despite the US ban on semiconductors, has developed its own microchips as well as software for semiconductor design.
The Semiconductor Industry Association presented five factories that Huawei has backed.
China has increased domestic subsidies in the tens and if not hundreds of billions dollars to combat US sanctions.
Local companies are developing more powerful and smaller microchips.
The US Department of Commerce stated: “It’s no surprise they are seeking substantial state funding to try to develop indigenous technology.”
“BIS (Bureau of Industry and Security) is constantly reviewing and updating export controls in response to the changing threat environment and will, as demonstrated by the October 7,2022 rules, not hesitate to take the appropriate actions to protect US national safety.”