Huawei hopes that chip production, such as chip packaging and printed substrates, will be largely completed in China by the end of the year to increase control of its supply chain, according to Nikkei Chinese. It is understood that Huawei has proposed to domestic and foreign semiconductor-related suppliers that it hopes to expand or move most of its production to China by the end of this year.
At present, many of the semiconductor manufacturing processes are scattered in Europe, Japan, South Korea and Taiwan, it is not possible to move arbitrarily, but Huawei has always hoped that the final process of packaging testing and subsequent printing circuit board manufacturing can be moved to China as soon as possible. Huawei is understood to have suspended the verification of new suppliers unless it already has Chinese capacity or is willing to cooperate with production in China.
Huawei’s future supply chain strategy is to localize, with suppliers with Chinese capacity as their primary strategic partners, the sources said.
In addition to asking suppliers to expand their capacity in China, Huawei is also actively supporting the technical capabilities of Chinese suppliers. Huawei is understood to have deployed more than 100 technicians to the plant of Jiangsu Changdian, China’s largest semiconductor packaging testing manufacturer, last year to assist in the upgrading of its technology, but “it is not going as smoothly as Huawei expected”. Huawei’s localization efforts began as early as 2018, when the U.S. abruptly cut off ZTE supplies.