Or Huuawei use its deep pocket to build its own fab and hire more process engineers from taiwna/korea/japan and license SMIC's 14/12nm tech to get going.
You propose 1 path. I propose 2 paths;using SMIC but also try on its own at the same time.
There are already too many fabs in China, but not enough equipment and engineers to operate them. We saw that previously with so many fabs being built then being mothballed.
It's not money or equipment that is the issue, but personnel and expertise that is in short supply.
The Chinese semiconductor companies are already trying to hire as many process engineers from abroad as possible.
What does a Huawei semiconductor working under US sanctions add?
Huawei is barred from semiconductor tooling/software that SMIC can currently obtain.
SMIC needs to focus on the semiconductor fab processes and equipment, before the US places it on the Entity List.
So Huawei trying to setup a 14nm/12nm process under license from SMIC is going to distract both Huawei and SMIC.
As for Huawei, I think its strategy has to be to sidestep the Entity List by focusing on creating new technologies/products that don't yet exist.
Eg. 5G, Internet of Things, ARM desktop/server processors, HarmonyOS software, AI, etc
So there are no existing competitors with superior technology and expertise, like we see in the semiconductor industry.
14nm/12nm fabs are an existing technology, so Huawei would have to spend billions and 5? years, just to get to that older technology level.
It would be nice if Huawei could get into semiconductor production, but SMIC can do a better job.
If SMIC needs funding for fabs, there is no doubt that it can get it.
But in 5-10 years, when Huawei and the overall Chinese semiconductor industry is a lot bigger, better and less dependent on foreign technology - it may make sense for Huawei to get into semiconductor fabrication.