Huawei is likely building secret network across China to produce chips
The Trade Group, a leading association of global chipmakers, warns that Huawei is building a shadow manufacturing network of secret semiconductor factories that will allow the blacklisted company to circumvent US sanctions
Bloomberg reported the information.
According to the Washington-based Semiconductor Industry Association, the telecommunications gear maker Huawei started manufacturing chips last year. It receives about USD 30 billion in government funding from the Chinese government and its hometown of Shenzhen.
Bloomberg noted that Huawei has bought at least two existing factories and is building at least three more, according to the company's presentation to investors.
In 2019, the US Department of Commerce blacklisted Huawei, eventually banning it from working with US companies. However, according to Bloomberg, if Huawei builds and purchases facilities under the names of other companies without disclosing its involvement, the telecommunications giant can circumvent these restrictions to buy American chip manufacturing equipment.
The US Department of Commerce's Bureau of Industry and Security said it is monitoring the situation and is ready to take action. The agency has already blacklisted dozens of Chinese companies, in addition to Huawei. The restrictions include two companies that, according to the SIA, are part of the Huawei network. These are Fujian Jinhua Integrated Circuit and Pengxinwei IC Manufacturing Co (PXW).
"Given the severe restrictions placed on Huawei, Fujian Jinhua, PXW and others, it is no surprise that they have sought substantial state support to attempt to develop indigenous technologies. The Bank for International Settlements (BIS) is continually reviewing and updating its export controls based on the evolving threat environment and, as evidenced by the Oct. 7, 2022 rules, will not hesitate to take appropriate action to protect US national security," the BIS said in a statement.
In April 2022, Ukraine’s Ministry of Digital Transformation reported that Huawei AppGallery stopped accepting Russian MIR cards and was purged from a number of Russian banking apps. At the time, the company had downsized but still supplied consumer electronics to Russia. In addition, a number of mobile apps of Russian banks disappeared from the store's catalog. For example, the apps of VTB Online, Promsvyazbank, and Otkritie banks are gone.