Huawei partners with European semiconductor firm

Chinese technology giant Huawei Technologies is working with French-Italian chipmaker STMicroelectronics (STMicro) to design chips for mobile devices and autonomous vehicles, a move industry analysts said will help secure its global supply chain as the US tightens export controls on the company.

The collaboration with STMicro, which began in 2019, will accelerate Huawei’s autonomous driving development, the Nikkei Asian Review reported Tuesday. The collaboration has not been announced publicly.

“It’s a good thing for both sides as many European semiconductor manufacturers have been battered by the fallout from COVID-19. Some of them have lost competitiveness in the global market, so forming a partnership with Huawei will ameliorate their financial woes,” Xiang Ligang, a veteran telecoms industry analyst in Beijing, told the Global Times on Wednesday.

Geng Bo, vice secretary-general of the China Solid State Lighting Alliance, a semiconductor industry association, said self-driving automotive chips will be the next battleground for Huawei.

While Huawei has insisted that it will not manufacture cars, its ambition of utilizing advanced information and communications technology to develop connected vehicles has been explicit in the past few years.

The new tie-up also mirrors Huawei’s latest strategy to diversify its supply chains, in a bid to be prepared for a harsher assault from the US government that may cut the Chinese tech company off supplies from Taiwan-based Semiconductor Manufacturing Company (TSMC).

“The strategy is one of not putting all your eggs in the same basket,”

Xiang said.

Huawei is gradually shifting parts of its chip production from TSMC to the Shanghai-based SMIC as part of broad efforts to get ready for a more relentless US crackdown, according to industry insiders.

Xiang suggested that Huawei and STMicro cooperate in a number of fields including chip design and manufacturing. “The European chipmaker could buy more lithography machines to scale up Huawei’s chip production. Chips produced by joint efforts can be sold not only in Europe but also globally,” Xiang said.

TSMC, a major producer of chips for Huawei and Apple, is being put in crosshairs of the Trump administration as it considers changing US regulations to allow it to block shipments of TSMC-made chips to Huawei.

“The US’ restrictions will become a long-term normal, not only aimed at Huawei, but also the rising Chinese semiconductor sector,” Geng said.