- Reports indicate that Huawei is building and operating DRAM factories through a joint venture with state-controlled SwaySure
- This is part of an alleged 11-factory network Huawei operates behind state-owned fronts, which 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.
More evidence suggests that Huawei is taking the same approach that led to building CPUs and AI chips for DRAM today.
The Chinese tech conglomerate is reportedly building and operating DRAM factories on the mainland, putting it in direct competition with only one major player on the same scale, albeit for a much larger consumer base: Samsung.
Draw on media reports and postings from semiconductor analysts, Blocks and 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 sanctioned necessity
Despite its implications and Huawei’s denials, the claim is hardly new: the first connection between the two companies was in 2025, when Financial Times published satellite images of Huawei’s advanced chip production line, linking it to SwaySure and citing government financial backing for the facilities shown.
However, Huawei’s alleged move did not happen in a vacuum; it finds itself in a situation where the Chinese state is increasingly and aggressively defending it, not just covertly but openly, 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 obvious part is easy to identify: The Semiconductor Industry Association estimated that Huawei is receiving $30 billion in state aid from the central government and its hometown of Shenzhen to build its chip network, while a separate 2019 estimate put the lifetime figure at $75 billion in state aid.
The government has also effectively barred its tech giants from buying AI chips from AMD and Nvidia, while making Huawei’s Ascend line the de facto standard in the Chinese market, guaranteeing Huawei revenue it would otherwise have to compete for.
The secret part is much harder to identify, but just as crucial: China also allegedly tolerates a shadow fab network that, at least on paper, is not directly connected to Huawei but is for all intents and purposes an arm of the giant, with the opacity making it difficult to pinpoint the direction and scope of Huawei’s ambitions in space. This is also why the US is resorting to Entity List designations for Huawei’s subsidiaries: Washington is trying to pierce a veil that Beijing has built on purpose.
The strongest corroborating signal, ironically, comes from Huawei’s adversary: the US government’s own Entity List designations suggest that BIS investigators concluded that these companies operate 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, where the US has tightened export controls to keep it, at least legally, out of Chinese hands.
While a Huawei making 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 manufacturers to ease its own supply woes.
However, Huawei’s products compete with Apple in the smartphone segment, with Intel’s server CPU offerings and with Nvidia’s AI chips, even as the latter struggles to gain a foothold in what was once one of its biggest markets by revenue.
It appears to have Samsung’s Western position in its crosshairs as it builds toward zero Chinese dependence on suppliers Washington can sanction, but it has a lot of catching up to do against the current king of the hill. Samsung has 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 significantly faster against China-based memory makers.
Chinese manufacturers, meanwhile, have reached relative parity in the NAND flash used in SSDs, an increasingly important place for AI, although Huawei still relies on SMIC for CPU and GPU manufacturing, a process that is about two nodes behind industry leader TSMC.
Huawei, at least on paper, has its own designs, but does not make them itself, leaving it to other specialized companies. But if the report holds true, it just might become the first real challenger to Samsung’s position as a chip designer, manufacturer and memory supplier rolled into one.
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