Huawei is building secret network for chips, trade group warns

Huawei Technologies Co is building a collection of secret semiconductor-fabrication facilities across China to let the company skirt U.S. sanctions, a Washington-based semiconductor association has warned, Bloomberg News reported on Tuesday.

The Chinese tech giant moved into chip production last year and is receiving an estimated $30 billion in state funding from the government, the Semiconductor Industry Association said, adding that Huawei has acquired at least two existing plants and is building three others.

The U.S. Commerce Department had added Huawei to its export control list in 2019 over security concerns. The company denies being a security risk. If Huawei is constructing facilities under names of other companies as Semiconductor Industry Association says, then it might be able to circumvent U.S. government restrictions to indirectly purchase American chip-making equipment, according to the Bloomberg report.

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

Huawei has been placed on a trade blacklist in the United States, restricting most suppliers from shipping goods and technology to the company unless they were granted licenses. Officials have continued to tighten the controls to cut off the company's ability to buy or design the semiconductor chips that power most of its products.