Taiwanese Tech Work With Huawei On China Chip Plant Project

Taiwanese Tech work with Huawei on China Chip Plant Project

DONGGUAN, CHINA - APRIL 25: The Huawei logo is seen on the side of the main building at the company's production campus on April 25, 2019 in Dongguan, near Shenzhen, China. Huawei is Chinas most valuable technology brand, and sells more telecommunications equipment than any other company in the world, with annual revenue topping $100 billion U.S. Headquartered in the southern city of Shenzhen, considered Chinas Silicon Valley, Huawei has more than 180,000 employees worldwide, with nearly half of them engaged in research and development. In 2018, the company overtook Apple Inc. as the second largest manufacturer of smartphones in the world behind Samsung Electronics, a milestone that has made Huawei a source of national pride in China. While commercially successful and a dominant player in 5G, or fifth-generation networking technology, Huawei has faced political headwinds and allegations that its equipment includes so-called backdoors that the U.S. government perceives as a national security. U.S. authorities are also seeking the extradition of Huaweis Chief Financial Officer, Meng Wanzhou, to stand trial in the U.S. on fraud charges. Meng is currently under house arrest in Canada, though Huawei maintains the U.S. case against her is purely political. Despite the U.S. campaign against the company, Huawei is determined to lead the global charge toward adopting 5G wireless networks. It has hired experts from foreign rivals, and invested heavily in R&D to patent key technologies to boost Chinese influence. (Photo by Kevin Frayer/Getty Images)

Taiwanese technology firms are forging strategic alliances with Huawei Technologies Co. to facilitate the establishment of semiconductor manufacturing facilities in southern China. This unique partnership has the potential to raise diplomatic concerns in Taiwan, particularly as the country prepares for crucial elections in January.

In the bustling city of Shenzhen, during a sweltering summer day in late August, an expansive construction site backed by Huawei attracted a dedicated workforce. Distinguished only by their vibrant safety vests displaying company logos, these industrious employees included personnel from prominent Taiwanese companies. A subsidiary of chip material reseller Topco Scientific Co. and a branch of Taipei-based L&K Engineering Co. were identified by Bloomberg News. Similarly, at another Huawei-affiliated site in the vicinity, Bloomberg uncovered workers from a subsidiary of construction specialist United Integrated Services Co.

Taiwan’s Cica-Huntek Chemical Technology Taiwan Co. briefly acknowledged on its website that it had secured contracts to provide chemical supply systems to two prominent Chinese chip manufacturers: Shenzhen Pensun Technology Co. and Pengxinwei IC Manufacturing Co. (the latter of which faced US sanctions last year). Both of these firms have been linked with Huawei in the development of advanced chip fabrication facilities. Following inquiries from Bloomberg News, Cica-Huntek Chemical Technology Taiwan Co. removed this information from its online platform.

This hitherto unreported collaboration involving Taiwanese entities and Huawei carries the potential for diplomatic repercussions within Taiwan, particularly given the looming electoral context. With China’s ongoing military threats in response to Taiwan’s independence aspirations, this partnership raises questions about the efficacy of US sanctions imposed on Huawei.

These queries come to the forefront after Huawei recently unveiled a smartphone featuring an advanced domestically produced chip, prompting concerns in Washington and calls for stricter limitations on Huawei and its Shanghai-based chip manufacturer, Semiconductor Manufacturing International Corp.