China's Coordinator In Chief: Huawei's Semiconductor Ecosystem

Semiconductors, or chips, lie at the heart of all modern electronics. They are the centerpiece of modern technology and represent the best of a nation's innovation. Though chips originated in the United States, Japan, South Korea, and Taiwan developed their own domestic industries that now sit at the leading edge. China, in its quest to transform into a high-tech manufacturing powerhouse, is also seeking to achieve the success of its East Asian peers. However, Moore's Law, which states that semiconductor technology doubles every two years, means chips advance quickly. This phenomenon makes "catch-up" increasingly more difficult for a country like China. Japan achieved technological "catch-up" through state-guided firm cooperation, while South Korea invested heavily in R&D. Taiwan's government incubated its firms before spinning them off to become global leaders. All three did so with relatively little scrutiny. With China, things are different. It is locked in a race for tech dominance with the United States and has faced increasingly restrictive export control regimes as a result. Therefore, China is seeking to achieve semiconductor "catch-up" under immense pressure from its fiercest competitor. This thesis evaluates Huawei and explains China's model, which combines national and local governments to support firm-led initiatives. This thesis evaluates the firm-driven policies that have enabled Huawei to become a facilitator of China's semiconductor ecosystem. Specifically, it analyzes Huawei's venture capital arm, Hubble, and the Shenzhen Municipal Government's networks.