Business & Economy

Huawei denies plans to build chip factory without need for US technology

Beijing, Nov 19 (efe-epa).- Chinese telecommunications giant Huawei on Thursday denied it has plans to build a chip manufacturing factory that will allow it to continue manufacturing its products amid supply problems arising from sanctions imposed by the United States.

In a statement sent to EFE, the company claimed that it “does not have any plans to build a chip manufacturing plant” and hoped that Washington will “lift its recent chip-related restrictions.”

Earlier this month, British newspaper Financial Times reported that Huawei had plans to build a chip-manufacturing factory in Shanghai that wouldn’t depend on American technologies.

It said that the factory would start manufacturing low-end, 28-nanometer (nm) chips in 2021 and 20 nm chips by the end of next year.

According to the report, the plant would be managed by Shanghai IC R&D Center, a research and development institute, supported by the local authorities.

“Cutting off Huawei’s access to chips doesn’t affect Huawei alone. These actions have damaged the global semiconductor industry as a whole, and have made more companies wary of incorporating US technology and components in their own products and solutions,” Huawei said in its statement on Thursday.

In August, the US Department of Commerce announced that from Sep. 15, Huawei’s global suppliers developing or producing components using US technologies would first need to obtain a license from Washington in order to sell to the Chinese company.

This effectively meant that the main chipmakers in Europe and Asia, including NXP Semiconductors in the Netherlands, Samsung Electronics in South Korea and MediaTek in Taiwan, can only sell their products to Huawei if the US authorizes it.

The Chinese tech company believes that the sanctions will eventually harm US interests as, in its opinion, they are leading to a “de-Americanization” of global supply chains.

This matter is also linked to the boost that the Chinese government is trying to give to the country’s tech sector to achieve self-sufficiency in the event that Washington wants to cut China off from global supply chains (the production of some key products is dominated by the US) amid the increasingly tense relations between the two economic powers.

Huawei has been a central part of the trade war between Beijing and Washington as it has been subjected to various sanctions by the US, which considers Huawei a threat to national security, believing the brand’s devices could be used to spy for Beijing, something that both the Chinese government and Huawei have denied.

One of the latest steps Huawei has taken to minimize the impact of US sanctions is the sale of its budget mobile phone brand, Honor, to a consortium led by a public company. Huawei said that the sale was “made by Honor’s industry chain to ensure its own survival.” EFE-EPA


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