After Being Banned in the U.S. and Facing a Countdown in the Smartphone World, Huawei Partners with SMIC to Produce Semiconductors

Huawei Banned In The US, Partners With SMIC To Set Up A Semiconductor Chip Factory With An Investment Of US$ 10 Million

Huawei remains blocked by the US from conducting business with American companies, which makes the company’s future uncertain in the smartphone and mobile device sector. Currently, the Chinese manufacturer has a partnership with the semiconductor chip manufacturer Semiconductor Manufacturing International Corporation (SMIC), aimed at establishing its own semiconductor and processor factory. Given that the US ban is unlikely to be lifted anytime soon, with a more adverse scenario probable, the company will have to rethink its strategy to avoid being completely outpaced by its competitors.

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Huawei And SMIC May Build A Semiconductor Factory

With the US ban and according to recent rumors, Huawei is said to have reached an agreement with local manufacturer SMIC to establish a new production unit for processors, semiconductors, and other chips that are necessary for smartphones and mobile devices.

Reuters reports mention, as well as SMIC’s production capacity, Huawei’s chip design and licensing capabilities. It is important to note that factories capable of producing semiconductors are in short supply worldwide. Therefore, if Huawei and SMIC reach an effective agreement, a new semiconductor factory may emerge in mainland China.

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Both Companies Are On The US Blacklist

Both companies are on the US blacklist, so the partnership could bring benefits to both technology giants. Huawei would thus have a greater capacity to manufacture semiconductor chips for its products, something that would help alleviate the difficulties resulting from the blockades and sanctions imposed by the US.

Currently, Huawei is severely limited in semiconductor production, which is also affecting its market position and compromising its access to other important technologies for its activities and equipment, such as mobile devices. SMIC is the most advanced Chinese company in chip manufacturing. It is effectively a foundry with the know-how to produce chips at 7 nm, for example. It is also a company partially supported by the Asian country.

Huawei Estimates To Invest US$ 10 Million In The New Factory

Huawei’s investment will amount to around US$ 10 million. Thus, what is expected is a new advanced factory equipped with the most modern production lines.

It is not yet clear who will own the new semiconductor chip factory, but given the investment that will be made, ownership could be attributed to Huawei.

In any case, the new facilities may be managed by both entities in China. However, it is necessary to wait for more information to assess the exact scope of this supposed partnership between the two companies.

After Meeting With Brazilian Minister, Tesla Owner Elon Musk Considers Meeting Semiconductor Demand And Brazil May Receive A Factory

In a meeting with Fábio Faria, Minister of Communications, last Monday (15), Elon Musk stated that to escape the ongoing microchip crisis worldwide, there might be no choice but to invest in a semiconductor factory.

Brazil would be one of the most likely countries to receive the CEO of Tesla’s investment. The topic arose after Faria proposed the construction of a Tesla factory in the country and mentioned that he also plans to make Brazil an important country in semiconductor production again, something that was happening until the 1980s.

The meeting in question, as seen in the featured photo, was actually for negotiations about the installation of Starlink satellites, which Elon Musk also serves as CEO, to monitor deforestation in the Amazon and connect schools located in remote areas with super updated internet.