Looking to develop advanced domestic chip-related companies, Chinese semiconductor equipment vendor Huawei has invested in more than 60 homegrown Chinese companies in a broad effort to build a semiconductor supply chain that is not reliant on foreign entities.
The move comes as export restrictions and tariffs from the U.S. have caused uncertainty in the Chinese electronics market. Advanced graphics processors, microprocessors, semiconductor manufacturing equipment and more have all been targeted by the U.S. government to be restricted to China as part of what the U.S. government calls a national security issue.
Because of this, Huawei is looking to ramp up its investment through Hubble, a fully owned investment firm that was established after initial export restrictions were put in place in 2019, according to a report from Nikkei.
Huawei’s Hubble has backed more than 60 Chinese firms spanning various semiconductor segments, Nikkei’s report uncovered. These run the gamut from:
- Chip design
- Semiconductor materials
- Semiconductor manufacturing
- Test equipment
Some of the companies that Huawei has invested in include:
- Suzhou Carbon Semiconductor Technology — a vendor specializing in carbon nanotube-based wafers
- Huahai Chengke New Material — a packaging materials vendor
- SiCarrier — a semiconductor equipment firm
Additionally, Huawei is developing its own technological capabilities and is building an advanced chip production line in Shenzhen to manufacture 7 nm smartphone and AI processors. This would be its first move to produce its own high-end chips. These chips would be designed by its subsidiary HiSilicon and manufactured by Chinese foundry Semiconductor Manufacturing International Corp (SMIC).
SMIC investing too
SMIC has also been one of the major targets of the export restrictions from the U.S. government, and not surprisingly, the vendor is also looking to expand into its own semiconductor manufacturing as a result.
In February, the company was found to be expanding its production capacity with new land buys for future capacity expansions. The plot of land is adjacent to Semiconductor Manufacturing Beijing Corp., which is backed by SMIC and a Chinese investment fund. The site is likely to focus on the production of 12-inch semiconductor wafers and packaging.
Chinese foundries' capital expenditures are likely to exceed market expectations, according to the market research firm TrendForce. This trend is driven by the surge in demand for AI inference models fueled by DeepSeek and a shift in orders to Chinese foundries following TSMC’s supply restrictions in China. This could potentially lead to further expansion, TrendForce said.
