source : bloomberg 2023
Huawei’s ecosystem transformation was triggered by a US trade restriction policy in 2019, which placed Huawei on a trade blacklist due to concerns over potential spying and privacy issues. This policy aimed to reduce Huawei’s global market share and restricted key players like Qualcomm, Intel and ASML from exporting advanced technologies to Huawei.
Facing these severe restrictions, Huawei and China government guidance fund (政府引导基金)recognized the necessity of developing its own industrial chip ecosystem. Consequently, key players within Huawei’s ecosystem emerged post-2020 to support the company’s manufacturing and supply chain needs. This mind map illustrates the relationships and key players within Huawei’s evolving chip ecosystem, showcasing how Huawei navigated industry dynamics amid geopolitical challenges.
The relationship between Huawei and the main local actor, Shenzhen Industry Investment Group, is noteworthy. This local governmental group receives funding and support from the municipal government of Shenzhen, which is a common model in China where various industries benefit from local government investment through the Chinese Big Fund.
Shenzhen Industry Investment Group strategically invests in chip fabrication companies and equipment providers like SICARRIER to meet Huawei’s industrial requirements. Huawei plays a pivotal role by serving as a key customer for government-supported companies such as PXW, Swaysure, and PST. Additionally, Huawei acts as a supplier of engineers and the patents to SICARRIER and its affiliated companies.
This dynamic demonstrates how local government investment, coupled with Huawei’s role, shapes and supports the development of the chip industry ecosystem in Shenzhen. The collaborative efforts between these entities contribute to addressing Huawei’s supply chain challenges and fostering technological advancement within the region.
By Chenyu Huang
