A Washington-based semiconductor association has warned that Huawei Technologies is building a series of secretive semiconductor manufacturing facilities across China to circumvent U.S. sanctions, Bloomberg News reported on Tuesday.

The Chinese tech giant started dabbling in chip production last year and received an estimated $30 billion (roughly Rs 2,488 billion) in state funding from the government, the Semiconductor Industry Association said, adding that Huawei had acquired at least two existing factories, And three more are under construction.

In 2019, the U.S. Department of Commerce put Huawei on the export control list for security reasons. The company denies there is a security risk.

If Huawei builds facilities in the name of other companies, as the Semiconductor Industry Association has said, it may be able to bypass U.S. government restrictions and buy U.S. chipmaking equipment indirectly, Bloomberg reported.

Huawei and the Semiconductor Industry Association did not immediately respond to Reuters’ requests for comment.

Huawei has been placed on a U.S. trade blacklist, restricting most suppliers from shipping goods and technology to the company unless licensed. Officials continued to tighten controls, cutting off the company’s ability to buy or design the semiconductor chips that power most of its products.

Meanwhile, Richard Yu, head of Huawei’s consumer business, said in a keynote address at the company’s annual developer conference in the southern Chinese city of Dongguan earlier this month that Huawei’s smartphone business was on a “road to come back”. Yu Chengdong said that in the second quarter, Huawei’s domestic smartphone market share increased by 76.1%, ranking second in the high-end field.

The Chinese company also plans to return to the 5G smartphone business by the end of the year, according to the research firm, signaling a comeback after a ban on U.S. device sales hammered its consumer electronics business.

© Thomson Reuters 2023

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