Huawei Technologies is reportedly taking a massive step toward complete semiconductor self-sufficiency by building and operating its own Dynamic Random Access Memory (DRAM) fabrication plants in mainland China. If confirmed, the move would elevate Huawei into an exclusive tier of technology companies, joining South Korea’s Samsung as the only firms globally capable of producing their own central processing units (CPUs), solid-state drives (SSDs), and DRAM memory chips.
The development underscores the profound impact of US sanctions, which have forced the Chinese tech giant to vertically integrate its entire supply chain.
According to a report by TechRadar, citing industry publication Block & Files, Huawei is advancing its memory ambitions through a joint venture with Shenzhen-based memory maker SwaySure. The reports suggest that Huawei now exercises effective control over at least 11 different semiconductor fabrication facilities across China. While Huawei currently denies these claims, the strategic logic behind the move is clear: securing a captive supply of high-bandwidth memory (HBM) is essential for the continued development of its increasingly powerful Ascend AI chips.
Sanction-Mandated Necessity
The push into DRAM manufacturing is widely viewed as a “sanction-mandated necessity.” Since being placed on the US Entity List, Huawei has been systematically cut off from global semiconductor supply chains. China’s domestic chipmakers have already seized 41% of the local AI market as Nvidia’s grip loosens, gaining access to advanced memory chips from companies like SK Hynix and Micron. With China also barring domestic tech giants from purchasing AMD and Nvidia AI chips, Huawei’s Ascend processors have become the de facto standard in the Chinese AI market. To scale the performance of these chips to meet the demands of frontier AI models, Huawei must ensure a reliable, domestic supply of advanced memory.
The scale of Huawei’s semiconductor ambitions requires immense capital, which is reportedly being supplied by the Chinese state. The Semiconductor Industry Association previously estimated that Huawei is receiving $30 billion in state funding from the central government and the city of Shenzhen to build out its fabrication network. A separate 2019 estimate suggested the company had received up to $75 billion in lifetime state support. This massive financial backing is critical for entering the notoriously capital-intensive and technically challenging DRAM market.
A Unique Vertical Integration Strategy
If Huawei successfully establishes its own DRAM production, its level of vertical integration will be virtually unmatched in the global tech industry. Even American giants like Apple, Intel, and Nvidia do not manufacture their own memory chips; instead, they rely on specialized third-party suppliers. By controlling every aspect of the hardware stack, from the processor design to the memory and storage, Huawei could achieve deep system-level optimizations that might help offset the disadvantages of lacking access to the most advanced extreme ultraviolet (EUV) lithography tools.
The US government has closely monitored Huawei’s expanding network. Recent Entity List designations of various Huawei affiliates imply that investigators at the Bureau of Industry and Security have concluded these ostensibly separate companies are functioning as a single, coordinated network. As Huawei continues to build out its full-stack capabilities, the technological decoupling between the US and China deepens, with Huawei emerging as the central pillar of China’s independent semiconductor ecosystem.
The HBM Bottleneck and the Path to Ascend Supremacy
High-bandwidth memory is the critical bottleneck constraining the performance of Huawei’s current Ascend AI chips. HBM stacks multiple layers of DRAM dies vertically and connects them with thousands of tiny through-silicon vias (TSVs), enabling data transfer speeds that are orders of magnitude faster than conventional memory. Without access to HBM from SK Hynix or Micron, both of which are prohibited from supplying Huawei, the company has been forced to use less capable memory configurations in its Ascend 910B and 910C chips, limiting their performance relative to Nvidia’s H100 and B200 accelerators.
Successfully developing domestic HBM production would be a transformative achievement for Huawei and for China’s AI industry more broadly. It would remove one of the most significant remaining performance gaps between Chinese and American AI hardware, potentially allowing future Ascend chips to compete more directly with Nvidia’s flagship products. The SwaySure joint venture, if it achieves volume production of HBM, would represent a major milestone in China’s semiconductor self-sufficiency drive, and a significant setback for US efforts to maintain a decisive technological edge through export controls.
For the global semiconductor industry, Huawei’s vertical integration ambitions represent a profound structural shift. The established model of the chip industry, in which fabless designers, specialized foundries, and memory manufacturers each occupy distinct niches in a globally integrated supply chain, is being disrupted by the geopolitical imperative of self-sufficiency.
If Huawei succeeds in building a fully integrated chip stack, it will not only transform its own competitive position but also demonstrate to other Chinese companies and to the Chinese state that full semiconductor independence is achievable. That demonstration effect could catalyze a wave of additional investment in domestic chip manufacturing, accelerating China’s broader push to build a technology ecosystem insulated from the disruptions of geopolitical rivalry.