- Reports indicateHuawei is building and operating DRAM fabs through a joint venture with state-controlled SwaySure
- This is part of an alleged 11-fab network Huawei operates behind state-owned fronts that it denies exists
- The move, seen as a bid by Huawei to secure captive HBM supply for its increasingly powerful Ascend AI chips, could place the company above Apple, Intel, and Nvidia, none of which makes its own memory.
Mounting evidence suggests Huawei is taking the same approach that saw it build CPUs and AI chips in the past to DRAM in the present.
The Chinese tech conglomerate is allegedly building and operating DRAM fabrication plants on the mainland, bringing it into direct competition with only one major player at the same scale, albeit for a much larger consumer base: Samsung.
Drawing on media reports and postings by semiconductor analysts, Block & Files has published claims (which Huawei currently denies) that the company is potentially building and operating DRAM fabs through a joint venture with Shenzhen-based memory maker SwaySure, giving it effective control over at least 11 different semiconductor fabs in the region.
A move borne out of sanction-mandated necessity
Despite its ramifications and Huawei’s denials, the claim is hardly new: the first link between the two companies was in 2025, when the Financial Times published satellite images of Huawei’s advanced chip production line that tied it to SwaySure and cited state financial backing for the facilities shown.
Huawei’s purported move did not happen in a void, however; it finds itself in a situation where the Chinese state is increasingly and aggressively defending it not only covertly but overtly, on multiple fronts, as it responds to Washington-backed sanctions that limit and in some cases all but eliminate its ability to access cutting-edge silicon.
The overt part is easy to identify: the Semiconductor Industry Association estimated that Huawei is receiving $30 billion in state funding from the central government and its hometown of Shenzhen to build its chip network, while a separate 2019 estimate put the lifetime figure at US$75 billion in state support.
The government has also effectively barred its tech giants from buying AI chips from AMD and Nvidia while propelling Huawei’s Ascend line to de facto standard in the Chinese market, guaranteeing Huawei revenue it would otherwise have to compete for.
The covert part is much harder to identify, but equally crucial: China also allegedly tolerates a shadow fab network that is, at least on paper, not directly associated with Huawei but is, for all intents and purposes, an arm of the giant, the opacity making it hard to pinpoint the direction and scale of Huawei’s ambitions in the space. This is also why the US resorts to Entity List designations of Huawei’s affiliates: Washington is trying to pierce a veil Beijing built on purpose.
The strongest corroborating signal, ironically, comes from Huawei’s adversary: the US government’s own Entity List designations imply that BIS investigators concluded these companies function as one network, which is as close to official confirmation as is currently available.
Huawei’s move stems from a voracious appetite for AI-centric High Bandwidth Memory (HBM), which sanctions ensure it cannot source directly from international suppliers, with the US having tightened export controls to keep it, at least legally, out of Chinese hands.
While a Huawei that fabs its own DRAM would be a notable leap, it may be more of a potential future supplier to Apple than a direct competitor, as Apple is toying with the idea of buying memory from Chinese makers to ease its own supply issues.
Huawei’s products do, however, compete with Apple in the smartphone segment, with Intel‘s server CPU offerings, and with Nvidia’s AI chips, even as the last of these struggles to find a foothold in what was once one of its largest markets by revenue.
It does seem to have Samsung’s Western position in its crosshairs as it builds toward zero Chinese dependency on suppliers Washington can sanction, but it has a lot of catching up to do to hold its own against the current king of the hill. Samsung holds a 3–4 year lead in HBM, arguably the gap that matters most, over China’s CXMT, while its DRAM lead is much narrower and closing considerably faster against China-based memory makers.
Chinese makers have meanwhile reached relative parity in the NAND flash used in SSDs, an increasingly important space for AI, even as Huawei still relies on SMIC for CPU and GPU fabrication, a process roughly two nodes behind industry leader TSMC.
Huawei, at least on paper, has its own designs but does not fab them itself, leaving that to other specialist firms. But if the report holds true, it just might become the first real challenger to Samsung’s position as chip designer, fabricator, and memory supplier all rolled into one.
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Rahimnoorali11@gmail.com (Rahim Amir)
