Huawei is building production lines for advanced chips, part of Shenzhen’s network of semiconductor facilities that seeks to break China’s reliance on foreign technology.

The tech giant is a key player in Guanlan’s three manufacturing sites, a region in the southern urban area where Huawei is located, according to multiple people near the location by the Financial Times.

Satellite images obtained by FT show how the Guanlan factory built in the same style was developed quickly after construction began in 2022.

These facilities have not been reported before, demonstrating Huawei’s ambition to become a semiconductor leader, which has fueled China’s efforts to challenge the U.S. in developing technologies such as artificial intelligence.

"Huawei has begun an unprecedented effort, from wafer manufacturing equipment to model building, from developing every part of the AI ​​supply chain domestically," said Dylan Patel, founder of CHIP Consultancy semi-analytics. "We have never seen a company trying to do everything."

Huawei runs one of the websites, which they say will make its 7nm smartphone and Ascend AI processor, the company's first effort to make its own high-end chip, according to people familiar with the matter.

The other two sites completed last year are operated by Chip equipment manufacturers Sicarrier and Memory-Chip Maker Swaysure. Although Huawei denies ties to the two startups, industry insiders say the company connects with the group by helping to increase investment and share employees and technology.

The facilities also have financial support from the Shenzhen government, according to people familiar with the matter.

Huawei is involved in a project aimed at developing technology alternatives from Chip Designer Nvidia, equipment manufacturer ASML, Memory-Chip Maker SK Hynix and contract manufacturer Taiwan Semiconductor Manufacturing Corporation.

Huawei's bargaining efforts accelerated Washington's sanctions in 2019 and removed the company from key foreign technology. Its work constitutes a broader government effort to localize key components in the face of U.S. export controls aimed at hindering China's technological development.

"I think Huawei is once the United States catches up," said a company executive. "But its ambitions will only grow, and its progress is extraordinary."

The locations are close to a factory (or foundry) operated by Logic-Chip Makers Pengxinwei (PXW) and Shenzhen Pensun (PST), which the U.S. government alleges are linked to Huawei.

According to data from those who know the work, the company has also invested in semiconductor manufacturing facilities in Shanghai, Ningbo and Qingdao.

Some industry insiders are aware of Huawei's relative experience in the semiconductor manufacturing industry compared with domestic and international competitors, and can realize its lofty ambitions.

"It's a big project with a lot of state support," Chip investors said. "But, for decades, companies with competitors in China have worked on the same thing without trying to match ASML and TSMC."

Guanlan locals have called the website run by Sicarrier and Swaysure belongs to Huawei, although the tech giant has denied links to startups. Industry insiders say that while the two companies have different shareholder base libraries and structures, they have other close ties.

People familiar with these developments say Huawei provides early support for startups by dispatching management and technical teams to help raise funds and, in some cases, transferring technology. One of the people said that the connection with Huawei has given national funds "confidence" to invest.

This arrangement allows state funds to invest in Huawei's chip development plans through its network of chip startups without the need for the group itself to make external investments and dilute its shareholder base.

"These companies will be cut off once they reach a certain stage of development," said one person who knows their operations. "In the process, Huawei empowers them by providing people, technology and systems. This helps speed up the iteration of technology and improves their chances of success."

According to people familiar with the matter, Sicarrier stood out from Huawei Labs with the support of the Shenzhen State Foundation. It was registered as a company in 2021. Bloomberg previously reported on the link between Huawei and Sicarrier.

It kept its low profile until March, when it launched about 30 tools, including etching, testing and deposition equipment at the Peninsula Conference in Shanghai.

Sicarrier has several subsidiaries, including Yuliangsheng, a Shanghai-backed government-sponsored company specializing in lithography. According to people familiar with the matter, Yuliangsheng, a former Huawei engineer, is developing a deep ultraviolet lithography machine. Sicarrier has not disclosed its DUV efforts.

The second site is operated by Swaysure, which provides Huawei with memory chips for automotive and consumer electronics.

Huawei declined to comment on detailed issues related to this article, but said: "Authorizes all (those) Shenzhen semiconductor-related activities to Huawei.

Sicarrier and Swaysure did not respond to requests for comment.

The third site is Huawei's self-operated facility, which includes its smartphone manufacturing lines and Ascend AI chips and technologies related to its autonomous driving business, the two said.

Semi-analysts say its architectural style matches other Huawei affiliated foundries. Additionally, the so-called wafer bridge connecting the building on the north side and nearby utilities has the logo of a chip manufacturing plant.

Construction will be completed in the next few months, but according to those who know how to identify the facility, it will take at least a year to start running as Huawei seeks most of the equipment that is still made in China.

Huawei's attempt to make its own chips was frustrated by the low production volumes of its local manufacturing partner, Shanghai Manufacturing Corporation.

In the last year when exposed to using third-party companies to circumvent the use of TSMCs to make AI chips, you need to enable Huawei to increase the manufacturing capacity of rising chips to improve the manufacturing capacity of rising chips.

Many partners and competitors, including SMIC and Shanghai Microelectronics, bring key engineering expertise to Huawei's projects.

An industry insider said Huawei's political influence means the company is expected to help, even if it means helping competitors.

SMIC has dispatched engineering teams to assist in the establishment of the facility. Meanwhile, even though Huawei is poaching many technicians, Smee is a leading domestic lithograph provider of printing tools and has been providing support. Neither company responded to a request for comment.

The U.S. government targets Huawei's network. Last December, Washington placed Sicarrier and Swaysure on the "entity list" and banned U.S. companies from selling technology to them.

The government claims they are assisting Huawei in its efforts to establish advanced chip technology that modernizes military.