Huawei’s Chip Development Division has struck a deal to build an internal supply chain. This is the first public move against US restrictive measures aimed at denying a Chinese company access to vital technology.
Shenzhen JT Automation Equipment, a Chinese chip manufacturing equipment manufacturer, filed on the stock exchange that it signed a five-year legally binding memorandum of understanding with HiSilicon Technologies, the largest chip developer in China.
“The two sides are looking to expand cooperation in the development of semiconductor packaging equipment, trying to solve the problem of suffocation and form a self-sufficient and manageable industry,” – said in the application, clearly referring to US efforts to restrict Huawei’s supply.
JT, founded in 2004 in Shenzhen, positions itself as a manufacturer of equipment needed for the production of consumer electronics, automotive electronics, aerospace, aviation and defense technology.
The US Department of Commerce has repeatedly tightened export controls against Huawei since May 2019, citing national security concerns. These measures are aimed at reducing access to American technology for Huawei and its subsidiaries. As part of the restrictions, the US has blocked many of HiSilicon’s suppliers, including the world’s largest contract chip maker TSMC and the largest chip packaging and testing service provider ASE Technology Holding, from partnering with a Chinese company. The US move has hit Huawei’s ability to produce cutting-edge chips and flagship smartphones. As a result, Huawei’s share of the smartphone market declined over the year from 18%, corresponding to second place, to 4%.
HiSilicon is China’s largest developer of chips used in a variety of devices, including smartphones, laptops, servers, cars and TVs. The division was also the world’s largest manufacturer of security camera chips and supplied products to the world’s largest security camera manufacturer, Hikvision, which is also blacklisted by Washington. HiSilicon’s Kirin mobile processors have helped Huawei smartphones compete successfully with Apple and Samsung Electronics.
To offset US pressure, the Chinese tech giant has invested in more than 30 Chinese chip companies in less than two years and acquired stakes in 10 semiconductor companies in the first six months of this year. The company has also increased its recruitment of employees around the world, especially in Europe, to work in semiconductor manufacturing, artificial intelligence, software and autonomous driving technologies.