Huawei Invests in Lithography Machines, Ascending Chip Industrial Chain

Chinese tech giant Huawei is investing in lithography machines, one of the core equipments required in semiconductor manufacturing, in a bid to mitigate the ongoing global chip shortage.

On June 2, the same day the firm released HarmonyOS, Huawei’s venture capital arm Hubble Technology Investment became the seventh-largest investor in Beijing RSLaser Opto-Electronics Technology Co with a share of 4.76%, according to public data.

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Focusing on the development of lithography machines, state-backed RSLaser produced the China’s first ultra-reliable excimer laser in 2018, making the country the third in the world to develop this technology, after the US and Japan. RSLaser reportedly invested 500 million yuan last year and plans to produce 30 sets of lithography excimer lasers and other equipment annually.

“Lithography machines and light sources determine the degree of precision of chips,” Fu Liang, telecom industry analyst expressed in an interview with the Global Times. Higher level products could also be introduced into other fields, said Fu.

After encountering difficulties in sourcing components from outside vendors caused by the global chip shortage and trade war with the US, Huawei invested in domestic chip manufacturers and designed its own chips to reduce its dependency on imported supplies. Since its establishment in 2019, Hubble Investment has supplied funding to nearly 30 companies, mainly in key industries such as semiconductor materials and equipment.

The Chinese government has also implemented tax incentive policies and other forms of state support to encourage the development of its domestic semiconductor industry. Wei Shaojun, professor at Tsinghua University said the number of chip design companies in China reached 2,218 in 2020, representing more than twofold growth from 2015.

But the global chip supply is still dominated by certain enterprises, said Fu. A research report on semiconductors published by IC Insights holds that China can only produce 19.4% of the chips consumed domestically, but the goal set by regulators in Beijing is 70%.

Xu Zhijun, Huawei’s rotating chairman said that Huawei is shifting to software development, automobile production and 5G technology to combat supply uncertainties.