Huawei and the big chip turnaround: Eleven fabs, many names, one goal – self-sufficiency made in PRC

It has been more than clear since the US embargo that Huawei is not satisfied with half measures. However, instead of retreating like other companies or falling into import panic, the company has apparently preferred to unpack its toolbox – quite literally. According to a recent report by The Elec, Huawei now operates at least eleven of its own semiconductor factories. Or rather, eleven production sites spread across China like a patchwork quilt of aliases and subsidiaries. Much of this may seem harmless at first, but it is strategically well thought out. The Chinese don’t do it loudly, they do it thoroughly.

Mimicry as a corporate strategy

What is special about this Huawei offensive is not so much the fact itself – companies build fabs after all – but rather the way in which they are going about it. Instead of loudly inaugurating a super-fab with a PR ribbon cutting and drone shots, the company prefers to work on a small scale. Names such as Qingdao Si’En, PST, PXW, SWX or PJHT initially sound like medium-sized logistics service providers or software start-ups. But if you take a closer look, you will discover a fairly consistent pattern: everything is located close to Huawei hubs, everything operates silently, everything produces. And not too close.

7 nm production in the middle of invisibility

At least five of these locations are said to be able to manufacture chips in 7 nm structures. This is remarkable in that China was previously mainly represented in this area by SMIC – another company that has been hit hard by sanctions. Huawei is therefore starting where it has been hit hardest: in production. Instead of using external contract manufacturers, production is now being ramped up internally. This is called vertical integration in the industry textbook. In practice, it means fewer dependencies, fewer political targets and more control.

Everything for own use – for now

The new production structure currently seems to primarily benefit Huawei itself. The SoCs developed in-house, be it Kirin chips for smartphones or Ascend processors for AI acceleration, need production capacity. A lot of it. This also explains why the new fabs are not focused on efficiency or diversity, but simply on throughput. Mass instead of class – at least for the time being. Because as long as there is no complete independence in lithography, yield is a downstream problem anyway. The important thing is that production takes place at all.

Government backing: not an open secret

The fact that many of the Huawei-related production facilities are supported by the state is not an operational accident, but part of the plan. China’s semiconductor policy since 2020 can be summarized in three key words: promote, duplicate, seal off. Huawei operates within this framework, but in its own way. While other companies are waiting for government subsidies, Huawei has apparently already started pouring the concrete before the subsidy notices have even been sent out. A certain pragmatism seems to resonate here.

SMIC as a reference, not a role model

If you compare Huawei with SMIC, an interesting picture emerges. Both rely on their own production lines, both were created under Western pressure, both try to get the most out of limited equipment. But while SMIC takes the path of official communication – including technical specifications and announcement rhetoric – Huawei remains in the shadows. They produce, they deliver, they don’t talk about it. It seems almost European and unexcited.

Not a monolith, but a network

What Huawei has built is not a monolithic mega-complex, but a network of semi-independent units that work together functionally. Modular, disguised and therefore resistant to selective interventions. Should a Fab fail, the structure remains intact. If a location is sanctioned, the backup takes effect. The cost of this redundancy is considerable, but understandable from the company’s point of view. In a world in which technology supply chains are becoming a geopolitical weapon, independence is not an option, but a necessity.

Conclusion with a frown

Huawei is getting serious. And without any pomp. Building up its own production capacities is not a sideshow, but a core strategy. While the West is still debating export controls and meeting in commissions, China is building, structuring and scaling up. It remains to be seen whether this will ultimately result in truly competitive products. But those who operate eleven fabs to supply themselves are not pursuing a short-term goal. This is not a reaction, but a reorganization. And it is – at least technically – impressively consistent.

Source: The Elec