Huawei is now believed to operate at least 11 semiconductor fabrication plants across China, covering memory, logic, and foundry segments—underscoring its strategic shift toward becoming a fully integrated device manufacturer (IDM), similar to Intel or Samsung.
Since the US tightened semiconductor export controls in 2019, Huawei has rapidly advanced its IDM ambitions with strong government support. According to South Korean media The Elec and Quasarzone, citing multiple industry sources, the company now controls, directly or indirectly, seven semiconductor firms operating 11 fabs, with product lines that include foundry services, DRAM, IoT, and mobile chips.
Factoring in R&D centers, Huawei's total facility footprint could reach 20. These sites support the production of DRAM, foundry wafers, and semiconductors tailored for mobile and IoT devices.
State-linked shell companies across major cities
Huawei's chip operations are cloaked under a web of regionally branded companies. In Qingdao, it works through SiEn (QingDao) Integrated Circuits Co.; in Dongguan, via DGGMT; and in Shenzhen, through a network that includes Pensun Technology Co. (PST), PXW Semiconductor Manufactory Co. (PXW), SwaySure Technology Co. (SWX), and Pengjin High-Tech Co. (PJHT). Fujian's Jinhua Integrated Circuit Co. (JHICC) also runs active fabrication lines.
Most of these firms are state-owned or backed by local government entities. SiEn is overseen by Qingdao's SASAC, while DGGMT falls under Dongguan SASAC. The Shenzhen-based firms are wholly owned by Shenzhen Major Industry Investment Group (SZMII), a state-backed entity under Shenzhen SASAC tasked with advancing strategic industries such as semiconductors, AI, and advanced manufacturing.
While none of these firms publicly link to Huawei, industry insiders widely assert that the company runs them behind the scenes. "In the industry, all of these companies are recognized as being under Huawei," one insider told Korean media. "Even among factory employees, there's talk that Huawei is operating them."
Huawei reportedly avoids using its name on these ventures to mask direct association. PST, for example, was formerly known as Pengxinshu (PXX) before a name change. Bloomberg reported in 2023 that China's government established SZMII to support Huawei, noting that Huawei and SZMII had invested in PXW, PST, SWX, and equipment makers such as SiCarrier, Cornerstone (photoresist), ZTOP (optical inspection), and YourSend (process tools).
Semiconductor specialist Jukanlosreve noted on X that SZMII had funded 12 semiconductor supply chain firms, including three chip manufacturers tied to Huawei, in a post titled "Report: Huawei Operates at Least 11 Foundry and DRAM Fabs… Is Huawei Aiming to Become China's Samsung?"
Sub-7nm ambitions and a domestic toolchain
At least five of the 11 current fabs are reportedly capable of sub-7nm process technologies. These include sites run by SiEn, DGGMT, PST, PXW, and SWX.
PXW, founded by a former Huawei executive, is said to be the largest of the group. SWX focuses on DRAM and was previously led by the late Yukio Sakamoto, former Elpida president and Tsinghua Unigroup executive. SiEn specializes in IoT chips and was founded by SMIC co-founder Zhang Rujing, while PST and DGGMT focus on mobile chip production.
Together, these firms operate nine production fabs—five under SiEn and two each from PXW and PST. Eight of these facilities produce 12-inch wafers, while one manufactures 8-inch wafers.
The Financial Times report had earlier identified a semiconductor facility as Huawei's, though sources say it was likely a SWX plant. Satellite analysis from The Elec suggests SWX runs three fabs, one of which reportedly uses only domestically made tools from Huawei-backed SiCarrier.
R&D footprint and strategic scale-up
Beyond production, Huawei is rapidly expanding its R&D presence. It operates 10 research sites in Shenzhen, Dongguan, and Qingdao via eight affiliates. These facilities are so large that many analysts believe they support not only experimentation but limited-scale manufacturing.
One major R&D complex in Dongguan is being developed in three phases, with Phase 3 alone estimated to cost KRW6 trillion (US$4.3 billion). Another Dongguan R&D cluster reportedly includes six large buildings, and some insiders believe these centers may partially support volume production.
Huawei's broader chip ecosystem is supported by SZMII and its venture arm, Hubble Technology. A 2023 report from the China Specialist Forum (CSF) in South Korea noted that Hubble had invested in at least 79 firms as of mid-2023, covering analog ICs, wireless chips, photonics, and sensor tech—all in pursuit of a vertically integrated IDM model.
Beijing is backing the effort with Big Fund III, a newly launched semiconductor investment program running from 2024 to 2039 and totaling CNY344 billion (US$47.8 billion)—roughly the size of Big Fund I and II combined.
Aiming to replicate its telecom playbook
Huawei's semiconductor push closely mirrors its earlier climb in telecom equipment. Once a latecomer, it now leads the global market with a 31% share in 2024–2025, ahead of Cisco, Ericsson, and Nokia, according to Dell'Oro Group and Omdia.
By combining aggressive investment, cost competitiveness, and state backing, Huawei leapfrogged telecom rivals. Observers are now watching to see if it can repeat that feat in semiconductors.
With tightening US export controls and rising geopolitical tensions, Huawei's chip infrastructure—fueled by state support and shielded by a web of intermediaries—shows that its IDM transition is not merely aspirational but already underway.
Article edited by Jerry Chen
