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Huawei is reportedly working with SMIC to build a custom semiconductor manufacturing facility in China for its needs. The Chinese giant will thus try to avoid the impact of US sanctions that severely limit its access to key chip technologies.

According to reports by Huawei Central and UDN, the company plans to spend as much as $10 billion on the factory. The new factory is expected to be built near Shenzhen and will likely produce HiSilicon chips using semiconductor technologies developed by SMIC.

Based on the $10 billion investment, it was stated that this could be a highly developed 300mm wafer plant. There is no reliable information about the process technologies planned for the factory, but at worst, 28nm plates will be produced. Huawei should also be interested in 14nm FinFET technology.

Currently, SMIC’s most advanced manufacturing process is called N+1, which is believed to be a 7nm-like technique. Meanwhile, SMIC is capable of high-volume production at the 14nm node. HiSilicon is able to design modern chips for TSMC’s N5 series technologies. But they also have a lot of SoC solutions for legacy processes.

Rumors have been circulating for a while about Huawei’s plans to build its own factory and advanced equipment. The information from two different sources seems quite reliable. Building a new factory for Huawei and SMIC will be inherently difficult. Even SMIC has many difficulties in acquiring all the equipment it needs for its factories. However, this is a very important move to reduce dependence on the USA.


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