Huawei, SiCarrier, and the Making of China’s Shadow Semiconductor Equipment Industry
In my September 2, 2020 article, China Equipment Suppliers’ Threats for Applied Materials and Peers, I wrote the following:
“Semiconductor manufacturers typically take 9-12 months to evaluate a piece of equipment and make decisions on a "best-of-breed basis." However, I have learned from my sources that the Chinese government is demanding that a portion of equipment used in a fab must be Chinese made.
This begs the question. If Chinese made equipment is sitting side-by-side to a foreign-made system, how difficult would it be for Chinese equipment engineers to keep their eyes and ears open to discover features of the foreign equipment that could be implemented into their own. In other words, IP theft.
On the other side of the coin, if foreign equipment companies were blocked from shipping more equipment, would it open the flood gates for more IP theft because foreign engineers may not be permitted by the Commerce Department to monitor equipment? For example, in October of 2018, Commerce effectively shut down Chinese semiconductor firm Fujian Jinhua—cutting it off from U.S. suppliers, including suppliers of semiconductor-making machines. The firm had stolen U.S. memory chip maker Micron’s (MU) technology, which I wrote about in a Nov. 6, 2018 Seeking Alpha article entitled “U.S. Restricts Exports Of Some Chip Production Equipment To China - Impact On Memory And Equipment Suppliers.”
It was my understanding that foreign equipment engineers picked up their tools and exited the building. What happened to that equipment? Were they reverse engineered in another example of IP theft?”
That concern is no longer theoretical. Few people outside China ever heard of SiCarrier. But that will change.
The quiet emergence of SiCarrier as a full-line semiconductor equipment supplier is a direct outcome of the industrial vacuum created by sanctions. It is not simply an act of copying. It is a national inversion of dependency—an escape route carved through geopolitical constraint.
The company now stands as a flagship of China’s unflinching march toward self-sufficiency. And its journey, beginning with reverse engineering in the echo chambers of abandoned fabs, is both an industrial parable and a warning for global incumbents.
This article, along with numerous articles I’ve written on Failed China Sanctions at Seeking Alpha and Substack, serve to illustrate the need for a re-thinking of strategies to rein in China’s drive to make itself technologically sovereign—particularly in semiconductors and AI infrastructure.
Attempts to block progress through hardware denial have, paradoxically, accelerated domestic development. Export bans meant to freeze China’s access to cutting-edge tools have instead ignited a nationwide push for replication, substitution, and architectural reinvention. And while restrictions on advanced GPUs and AI accelerators were designed to delay deployment of frontier models, the reality is that Huawei, Alibaba, Baidu, and a growing ecosystem of state-backed players are already fielding powerful alternatives—many trained or fine-tuned in cooperative cloud environments that lie just outside the reach of U.S. enforcement.
Sanctions are now chasing shadows in an ecosystem defined by scale, creativity, and national resolve. The question is no longer whether China will catch up. The question is how far it will go before the West rewrites the playbook.