In order to make China an autonomous “technological power”, the Chinese Communist Party is asking the world’s largest e-commerce companies to develop their own processing chips. Experts warn that this move will disrupt international trade and increase global anxiety.
Alibaba Group launched the third processor “Yitian” 710 chip for Alibaba Cloud in October, and said that it has no plans to sell such chips.
Other electronics companies that are developing chips include Tencent and Xiaomi. He has promised to invest millions of billions of dollars to implement official plans to build computing, clean energy and other technologies.
Tencent announced the launch of the first three chips in November for use in artificial intelligence, cloud computing and video.
In order to end China’s technological dependence on the United States, Japan, and other potential economic strategic opponents, the CCP is making chips a priority. Beijing said that from 2014 to 2030, It will invest around US$ 150 billion to develop its own chips industry.
Businesses and analysts pointed out that this plan may lead to costly disappointment because even with huge government investment, chip manufacturers and other companies will face great difficulties if they decouple from global suppliers of advanced components and technologies. No other country in the world is pursuing this goal.
Business and political leaders warned that if this plan succeeds, it could hinder innovation and undermine global trade. If the world decouples or splits into several markets where standards and products are incompatible, components produced in the United States or Europe may not be usable on Chinese phones or cars. Smartphone makers with a single major global operating system and two network standards may need to develop unique languages for different markets, which may also delay its development.
Friends, Chinese factories collect the world’s smartphones and flat-screen computers, but they need components from the United States, Europe, Taiwan, Japan, and South Korea.
Industry insiders say that Huawei and some Chinese companies are currently able to develop logic chips for smartphones, but if they want to produce these chips, Shanghai SMIC is 10 years behind the world’s leading companies such as Taiwan Semiconductor Manufacturing Co., Ltd. Even if some Chinese companies can design their own chips, they may need Taiwanese or other overseas manufacturers to produce them. Friends, “Yitian” 710 chips of Alibaba company need accuracy which China cannot achieve, and the company declined to specify which overseas manufacturer will be used.
China occupies 23% of global chip production capacity, but its sales share is only 7.6%.
The Semiconductor Industry Association said in a report this year that China “severely lags behind” in chip production tools, materials, and technology. The United States and Europe use security as a reason to prevent Chinese chip makers from obtaining the most advanced precision chip manufacturing tools they need.
Bain & Co chip industry observer Peter Hanbury said that without these tools, China will fall further behind.
Beijing encourages smartphones and other manufacturers to use domestic suppliers, even if the prices are higher, but Chinese officials deny that they want to decouple from the global industry.