Huawei invests in semiconductor firms amid self-reliance push

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The exterior of a Huawei building in Shenzhen on July 30, 2019. (Image credit: TechNode/Shi Jiayi)

Huawei has invested in two domestic semiconductor firms focused on materials and chip design as the Chinese telecommunications equipment maker seeks to boost self-reliance amid US sanctions, National Business Daily reported on Tuesday.

Why it matters: Unlike Huawei’s previous strategy of investing in integrated circuit manufacturing, the deals indicate that Huawei is eyeing core semiconductor technology.

  • US restrictions on Huawei not only bar exports of the country’s technology and components to the Shenzhen firm, but also apply to products in which at least 25% of technology or materials originate in the States.
  • Huawei’s chipmaking affiliate HiSilicon produces most of Huawei’s smartphone components, but the company also relies on material and chip design tool imports from other countries.

Details: Huawei’s wholly-owned investment firm Hubble Technologies has invested in Shandong province-based Tianyue Advanced Material Technology and Hangzhou’s Joulwatt Micro-Electronic.

  • Tianyue Advanced Material is a manufacturer of silicon carbides used in semiconductors, while chip designer Joulwatt Micro-Electronic specializes in battery management ICs.
  • Hubble has taken a 10% stake in Tianyue Advanced Material, while its stake in Joulwatt Micro-Electronic was not revealed, said the newspaper.
  • Hubble was set up in April and is led by Bai Yi, the president of Huawei’s global financial risks control center.

Huawei declined to comment on the investments when contacted by TechNode on Wednesday.

Context: Huawei announced in July that it would invest RMB 120 billion (around $16.8 billion) in research and development (R & D) this year to bolster its technical self-reliance.

  • Huawei’s R & D spending was $15.3 billion in 2018, surpassing those of Microsoft, Apple, and Intel, to rank the 4th among global tech companies, according to China Daily.