Huawei Builds $1.4 Billion Shanghai Center as Chip War Heats Up

(Bloomberg) — Huawei Technologies Co. is close to finishing the construction of a chip research and development center in Shanghai, in a move that’s likely to advance China’s technological ambitions even as the US tries to halt its rise.

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The park, which will be Huawei’s largest research center globally, will house about 30,000 personnel, according to statements on the Shanghai government’s website. The site in Qingpu district covers 1.6 million square meters and has its own road network, a small railway system and elevated bridges which are already in place, the release said.

The new facility will pursue breakthroughs in semiconductors for devices, wireless networks and the Internet of Things, said a state media report in January which cited a Shanghai government briefing. The total investment cost is 10 billion yuan ($1.4 billion), according to a statement posted on the Qingpu government website.

Huawei has been a target of US sanctions and export controls for years, as Washington and Beijing vie for supremacy in the semiconductor sector. Last year, the company successfully navigated US restrictions to launch a new 5G phone which was powered by an advanced made-in-China 7-nanometer chip.

The Biden administration has since initiated further curbs to rein in Huawei’s chip progress, including asking its allies to add new restrictions on China’s semiconductor sector. It also revoked licenses that allowed Huawei to buy some chips from Qualcomm Inc. and Intel Corp. in an effort to plug any loopholes on existing conditions.

Read: US Seeks Allies’ Help in Curbing China’s AI Chip Progress (2)

Industry participants are likely to scrutinize Huawei’s next flagship smartphone, the Mate 70, which is expected later this year, for any signs that Beijing has made further strides in chip development. Its predecessor, the Mate 60, garnered strong demand from local consumers and helped Huawei gain some market share at the expense of competitors including Apple Inc.