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Inside Huawei’s secret plan to beat American trade war sanctions

In the first few weeks of 2019, 20 engineers from Huawei Technologies arrived in the riverside town of Jiangyin in eastern China on a secret mission. They took up stations at the state-backed Jiangsu Changjiang Electronics Technology, China’s largest chip packaging and testing company, where they went to work upgrading the facilities and increasing the site’s capacity, ahead of a production surge in the autumn.

“These Huawei staff are on-site almost seven days a week, from day to night, nitpicking and reviewing all the details … demanding strictly that the local company meets global standards as soon as possible,” one chip industry executive familiar with the situation told the Nikkei Asian Review. “It’s honestly like preparing for wartime.”

All across Asia, companies in the computer chip industry were receiving similar messages from Huawei: Boost your production, and we will buy your product. In a slowing global market, Huawei made a commitment that was impossible to resist: The company guaranteed up to 80 per cent utilisation rates for the next two years to potential and current suppliers.

 

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