SHANGHAI, China—Huawei is planning to build its own chipset factory here in order to circumvent the U.S. Department of Commerce's decision in August that prohibits U.S. suppliers from providing semiconductor products and components to Huawei and its subsidiaries. The factory will make parts for its telecom hardware business.

The new factory is to be run by Shanghai IC R&D Center, Huawei’s partner. For now, the factory is said to be an experiment till it starts making products for user-end products.

The plan is to start by building 45nm chipsets, followed by 28nm in 2021, and 20nm chipsets in 2022. Huawei considers the plant an investment for long-term survival, with the hope that the plant will push it behind its rivals in the telecom hardware market.

The produced chips will be good for IOT devices and 5G network hardware, but will not much help the company's smartphone business. This is because the firm is still working on finding a market outside China since the U.S. ban.

Although some firms have shown interest in selling parts to Huawei for the chipset, the ban still prevents the firm from buying parts for 5G business.
Nonetheless, just recently Huawei introduced its Mate 40 flagship smartphone series in China. The highlight of it was the company’s first-ever 5nm-based Kirin 9000 processor.