- Reports indicate that Huawei is building and operating DRAM factories through a joint venture with state-owned SwaySure.
- This is part of an alleged network of 11 factories that Huawei operates behind state facades that it denies exists.
- The move, seen as a bid by Huawei to secure HBM’s captive supply for its increasingly powerful Ascend AI chips, could put the company above Apple, Intel and Nvidia, none of which make their own memory.
Mounting evidence suggests that Huawei is taking the same approach that led it to build CPUs and AI chips in the past for DRAM in the present.
The Chinese tech conglomerate is reportedly building and operating DRAM manufacturing plants on the continent, putting it in direct competition with only one major player on the same scale, albeit for a much larger consumer base: Samsung.
Based on media reports and publications by semiconductor analysts, Block and files has published claims (which Huawei currently denies) that the company is potentially building and operating DRAM factories through a joint venture with Shenzhen-based memory maker SwaySure, giving it effective control over at least 11 different semiconductor factories in the region.
A measure born from the necessity imposed by the sanction
Despite its ramifications and Huawei’s denials, the claim is not new: the first link between the two companies was in 2025, when Financial times released satellite images of Huawei’s advanced chip production line linking it to SwaySure and cited state financial backing for the facilities shown.
However, Huawei’s alleged move did not occur in a vacuum; It finds itself in a situation where the Chinese state is increasingly aggressively defending it, not just covertly but overtly, on multiple fronts, while responding to Washington-backed sanctions that limit and, in some cases, nearly eliminate its ability to access cutting-edge silicon.
The open 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 puts the lifetime figure at $75 billion in state support.
The government has also effectively banned its tech giants from buying AI chips from AMD and Nvidia, while boosting Huawei’s Ascend line to the de facto standard in the Chinese market, guaranteeing Huawei revenues it would otherwise have to compete for.
The covert part is much harder to identify, but equally crucial: China also allegedly tolerates a shadow network that, at least on paper, is not directly associated with Huawei but is, for all intents and purposes, an arm of the giant, whose opacity makes it difficult to precisely determine the direction and scale of Huawei’s ambitions in space. This is also why the United States is resorting to Entity List designations for Huawei subsidiaries: Washington is trying to pierce a veil that Beijing purposely constructed.
Ironically, the strongest corroborating signal comes from Huawei’s adversary: the US government’s own Entity List designations imply that BIS researchers concluded that these companies operate as a single network, which is the closest to official confirmation currently available.
Huawei’s move arises from a voracious appetite for AI-focused high-bandwidth memory (HBM), whose sanctions ensure it cannot be sourced directly from international suppliers, and the United States has tightened export controls to keep it, at least legally, out of the hands of the Chinese.
While Huawei manufacturing its own DRAM would be a notable leap, it may be more of a potential future Apple supplier than a direct competitor, as Apple is toying with the idea of buying memory from Chinese manufacturers to alleviate its own supply problems.
However, Huawei’s products compete with Apple in the smartphone segment, with Intel’s server CPU offerings and with Nvidia’s artificial intelligence chips, even as the latter struggles to find a foothold in what was once one of its largest markets by revenue.
It appears to have Samsung’s Western position in its sights as it moves toward zero Chinese dependence on suppliers that Washington can sanction, but it has a lot of catching up to do to fend off the current king of the hill. Samsung has a 3-4 year lead in HBM, arguably the largest gap, over China’s CXMT, while its lead in DRAM is much narrower and closing considerably faster against China-based memory makers.
Meanwhile, Chinese manufacturers have reached relative parity in NAND flash memory used in SSDs, an increasingly important space for AI, even as Huawei still relies on SMIC for CPU and GPU manufacturing, a process about two nodes behind industry leader TSMC.
Huawei, at least on paper, has its own designs but does not manufacture them itself, leaving it in the hands of other specialized companies. But if the report is true, it could become the first real challenge to Samsung’s position as a chip designer, manufacturer and supplier of memory all rolled into one.
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