Huawei builds chip research and development center in Shanghai – Odd News

The Chinese tech company is spending billions and bringing in talent in the fight against the US crackdown.

Huawei Technologies is building a massive semiconductor equipment research and development center in Shanghai, as the Chinese tech titan continues to strengthen its chip supply chain to counter the US crackdown.

The center’s mission includes building lithography machines, equipment essential for the production of next-generation chips. Washington’s export controls have drastically reduced Huawei’s access to this equipment, whose production is dominated by just three companies: ASML of the Netherlands and Japan’s Nikon and Canon.

For staff at the new center, Huawei is offering salary packages worth up to twice what local chipmakers, industry executives and sources briefed on the matter told Nikkei Asia. The company has already hired several engineers who have worked with leading global chip tool manufacturers such as Applied Materials, Lam Research, KLA and ASML, they said, adding that chip industry veterans with more than 15 years of experience at leading chip manufacturers such as TSMC, Intel and Micron are also among the recent and potential hires.

Washington’s stricter export controls in recent years have also affected China’s labor market, including making it harder for Chinese citizens to work for foreign chip companies in the country. This left more chip talent available for Huawei and other local companies to choose from.

But while Huawei’s compensation package is generous, its work culture can be challenging, chip industry executives said.

“Working with them is cruel. It’s not 996, which means working from 9am to 9pm, six days a week. … It will literally be 007 – from midnight to midnight, seven days a week. There are no days off at all,” a Chinese chip engineer told Nikkei Asia. “The contract has a term of three years, but most people will not make it to the extension.”

Semiconductor equipment, like the chips themselves, has been caught in the crosshairs of U.S. export controls. Washington has pressured allies Japan and the Netherlands to impose similar restrictions on exports of advanced chip tools to limit China’s access to them.

These restrictions have prompted many Chinese chip makers to look for domestic alternatives where possible. Naura, China’s leading semiconductor equipment supplier, has more than quadrupled its revenue since 2018 and is expected to report another record year in 2023.

Huawei also responded to the US action by aggressively strengthening its domestic capabilities.

The new R&D center is located in western Shanghai’s Qingpu district, sources familiar with the matter said, on a spacious campus that also houses a large chip development center and the new headquarters of HiSilicon Technologies, its design unit. of Huawei chips. There are also research centers for wireless technologies and smartphones on site.

Total investments for the entire R&D base will amount to about 12 billion yuan ($1.66 billion), according to the Shanghai government, which has identified it as one of the city’s top projects for 2024.

The campus covers approximately 224 football fields and is almost twice the size of the company’s renowned Ox Horn Campus, a European village-style location in the Chinese city of Dongguan. Like Ox Horn, the Shanghai campus will feature trains to travel between campus buildings. When completed, it will be able to accommodate more than 35,000 high-tech workers, according to the People’s Government of Qingpu District, Shanghai Municipality.

Huawei said it had no comment on Nikkei Asia’s request for comment on its chip equipment efforts and referred questions about its R&D campus to the Shanghai government.

Huawei’s R&D expenditure reached a record 164.7 billion yuan in 2023, accounting for 23.4% of total revenue.

Before the US added Huawei to the trade blacklist, the company focused mainly on chip design and collaborated with global manufacturing partners such as TSMC and Globalfoundries for production. After restricting access to US technologies, Huawei turned to Chinese chipmaker SMIC and local chip developers. The company is now venturing into chip production with partners backed by local governments in several Chinese cities such as Shenzhen, Qingdao and Quanzhou, Nikkei first reported. It has also invested in many local chip material suppliers.

Huawei is one of the most aggressive Chinese companies when it comes to using local suppliers and investing in domestic alternatives, analysts say.

Brady Wang, semiconductor analyst at Counterpoint, said Huawei has been working hard to localize its chip-related resources and switch to local components from suppliers such as BOE Technology and Omnivision. “They invested more in HiSilicon and introduced chips for phones and servers,” Wang said. “They will look to localize more of their semiconductor supply chain. However, carrying out these efforts, especially those related to chip and equipment production, will be a time-consuming task.”