Huawei invested $1.66 billion to develop advanced chipmaking machines

Huawei actually invested around CNY12 billion ($1.66 billion) in order to develop advanced chipmaking machines. By doing this, Huawei aims to make chipmaking tools similar to those ASML offers.

Why is that? Well, Huawei has no way of getting those tools due to the US ban. Huawei is prevented from making chips more modern than 5nm ones, which is a problem. This is Huawei’s way of trying to jump over that obstacle.

Huawei invested quite a bit of money into R&D for advanced chipmaking machinery

The company actually invested in an R&D facility whose purpose is to develop advanced machinery Huawei needs. That R&D center is being constructed near Shanghai.

SMIC made 7nm chips for Huawei, and the two companies are working on manufacturing 5nm processors for this year. Anything newer than that is a considerable problem for Huawei.

SMIC and Hua Hong, Huawei’s chip-making partners, cannot get the tools needed to make processors on the 14nm FinFET and 16nm FinFET processes. They can only grab 28nm lithography systems, which are dated at this point.

ASML is allegedly holding 90% of the market

Huawei not only invested this money in order to help itself, but to break ASML’s monopoly, it seems. 90% of the market is reportedly controlled by ASML, and Huawei sees this as an opportunity to get a piece of the pie too and bring some balance to the table.

The area on which Huawei is building this factory is equivalent to 224 football fields and will employ over 35,000 employees. Needless to say, it’s quite massive. Huawei is also looking for top talent in the field of semiconductors and is ready to pay well.

Needless to say, however, this will take time. Huawei needs advanced chips as soon as possible, and building this factory plus conducting R&D and utilizing it in actual products will take quite a bit of time.