The reason that Huawei shouldn't get involved in Semiconductor because it's a banned company and couldn't get its hand on Western equipment , materials, technology is the exact opposite point that I am trying to make at this thread.
This thread is geared toward China building from ground up the complete Semiconductor supply chain, lithography, equipment, materials, etc. It should be completely independent from the West, not just US.
Huawei should take a very large role in that. It's influential and can help spawn a new industry. It doesn't take anything from SMIC because it's doing something new. It will train up a lot of new Semiconductor engineers.
This is playing offensive. Just to get in Semiconductor manufacturing using Western technology is conservative and playing defense only. It won't cure the root causes.
With semiconductor design, Huawei could rely on ARM and TSMC to support them. And semiconductor design is relatively cheap, because it's an investment of tens or hundreds of millions of dollars and relatively quick to turn around a design.
With semiconductor fabs, the investment can be counted in billions and years. Plus there will only be limited support from SMIC which is struggling to match Intel or TSMC today. And it's not funding which is holding back Chinese fabs.
It's personnel which is the limitations, and remember that there are also memory fabs which are trying to ramp up as well. And everyone is competing for the same people.
I agree that the Chinese semiconductor industry needs to have local alternatives available for every stage, but that does not require Huawei being a semiconductor fab company.
It would be better for them to be a customer, and support/invest in companies producing the tooling and supplies ans chips.
Plus you have to be realistic about what can be achieved by each company, and the timeframes.
The trade and technology war has already spawned new companies and additional support to existing companies. It doesn't all have to come from Huawei.