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 a U.S. crackdown.
The center’s mission includes building lithography machines, essential equipment for the production of cutting-edge chips. Washington’s export controls have sharply reduced Huawei’s access to this equipment, whose production is dominated by only three companies: the Dutch ASML and the Japanese Nikon and Canon.
To staff the new center, Huawei is offering salaries up to twice as high as local chipmakers, industry executives and informed sources say. Nikkei Asia. The company has already hired many engineers who have worked with the world’s largest chip tool makers such as Applied Materials, Lam Research, KLA and ASML, they said, adding that chip industry veterans with over 15 years of experience at leading chipmakers like TSMC, Intel, and Micron are also among the recent and potential hires.
Tighter export controls imposed by Washington in recent years have also impacted China’s labor market, including making it more difficult for Chinese citizens to work for foreign chip companies in the country. That left more chip talent for Huawei and other local companies to choose from.
But even though Huawei’s compensation package is generous, its work culture can be difficult, according to chip industry executives.
“Working with them is brutal. It’s not 996, which means working from 9 a.m. to 9 p.m., six days a week. …It will literally be 007 – midnight to midnight, seven days a week. No days off at all,” said a Chinese chip engineer. Nikkei Asia. “The contract will be for three years, [but] the majority of people cannot survive until revival.
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 implement similar restrictions on the export of advanced chips to limit China’s access to them.
These restrictions have prompted many Chinese chipmakers to seek domestic alternatives whenever possible. Naura, China’s leading semiconductor equipment supplier, has seen its revenue more than quadruple since 2018 and is expected to post another record year in 2023.
Huawei has also responded to the US crackdown by aggressively building up its domestic capabilities.
Its new R&D center is located in Qingpu district, west of Shanghai, people familiar with the matter said, on a spacious campus that also houses a major chip development center and the new headquarters of HiSilicon Technologies, Huawei’s chip design unit. There are also on-site research centers for wireless technologies and smartphones.
The total investment for the entire R&D base will be around RMB 12 billion ($1.66 billion), according to the Shanghai government, which listed it among the city’s top projects for 2024.
The campus covers approximately 224 football fields and is almost twice the size of the company’s famous Ox Horn campus, a European village-style site in the Chinese city of Dongguan. Like Ox Horn, the Shanghai campus will include trains for travel between campus buildings. Once completed, it will be able to accommodate more than 35,000 high-tech workers, according to the People’s Government of Qingpu District of Shanghai Municipality.
Huawei said it had no comment in response to Nikkei Asia requested feedback on its chip equipment efforts and referred questions regarding its R&D campus to the Shanghai government.
Huawei’s R&D spending in 2023 reached a record high of RMB 164.7 billion ($22.7 billion), accounting for 23.4% of its total revenue.
Before the United States added Huawei to its trade blacklist, the company focused primarily on chip design and partnered with global production partners such as TSMC and Globalfoundries for manufacturing. After its access to U.S. technologies was restricted, Huawei turned to Chinese chipmaker SMIC and local chip developers. It is now launching its own chip production with partners supported by local governments in several Chinese cities, such as Shenzhen, Qingdao and Quanzhou, Nikkei reported for the first time. It has also invested in many local chip material suppliers.
Analysts say Huawei is one of the most aggressive Chinese companies in terms of using local suppliers and investing in domestic alternatives.
Brady Wang, semiconductor analyst at Counterpoint, said Huawei has worked hard to localize its chip-related sources and shift to local components from suppliers such as BOE Technology and Omnivision. “[Huawei has] “invested more in HiSilicon and introduced chips for phones and servers,” Wang said. “[Huawei] will endeavor to locate a larger part of [its] semiconductor supply chain. However, completing these efforts, especially those related to chip manufacturing and equipment, will take a long time.
This article was first published on Nikkei Asia. It has been republished here as part of 36Kr’s ongoing partnership with Nikkei.