CHONGQING, CHINA – MAY 4, 2023 – Young technicians test the standard of electronic chips at a dust-free production workshop in Chongqing, China, May 4, 2023.
CFOTO | Future Publishing | Getty Images
Industry analysts are optimistic that Chinese chip makers will develop their very own advanced semiconductors despite Washington’s attempts to chop the country off from accessing or manufacturing the technology.
“I do not underestimate China’s ability and resolve to search out a solution to construct next generation technologies and to also utilize some lagging technologies to still construct really vital products,” Daniel Newman, CEO and principal analyst at research firm Futurum Group, told CNBC.
related investing news
Chinese corporations similar to Huawei and Alibaba are studying methods to develop cutting-edge artificial intelligence performance with fewer or less powerful semiconductors, or mix different chips to cut back reliance on a single hardware, in keeping with a report by The Wall Street Journal.
Industry experts consider it is going to be a “challenge” for these Chinese tech firms, but some experiments have shown “promise,” the WSJ reported.
Paul Scharre, vp and director of studies on the think tank the Center for a Latest American Security, said that “nothing’s not possible”
“I definitely think in the long term, we must always expect the Chinese to find a way to make these technological advancements. It’s quite possible that they are capable of achieve this faster than perhaps others might expect,” he said.
In a retaliatory move to Washington’s efforts to chop China off from advanced chip tech, China banned key infrastructure operators within the country from buying products from U.S. chip giant Micron Technology in May. Washington also reportedly urged South Korea to not let its chip makers fill Micron’s void in China.
Nvidia founder and CEO Jensen Huang said last week that the resources China is dedicating into its chip industry is “quite massive, so you possibly can’t underestimate them.”
China is pouring greater than 1 trillion Chinese yuan ($140 billion) into its chip industry, in keeping with a Reuters report. Domestic chip makers already profit from government subsidies and state-backed research projects.
Because of this, there are “many GPU startups in China” and existing players need to “run very fast ourselves” so as to stay within the competition, Huang told media on the Computex Taipei 2023 event last week. GPUs, or graphics processing units, are used to power AI applications.
The choice
China could also pursue dominance in legacy chips where it’s already making headway, analysts consider.
“China is showing good progress in making chips based on mature technology,” said Charles Shi, a principal and senior semiconductor analyst at asset management firm Needham & Company.
Mature technology refers to processes involved in making 28-nanometer or larger chips — generally considered legacy chips, with higher numbers denoting older technology. “These chips are increasingly vital for the automotive industry,” said Shi. These 28-nanometer chips are widely utilized in automobiles, consumer electronics, amongst other products.
U.K.-based evaluation provider Total Telecom said that China has acquired competency in 28-nanometer and 14-nanometer chip manufacturing back in 2021.
The demand for 28-nanometer chips is expected to greater than triple by 2030, making a market price $28.1 billion, in keeping with consultancy International Business Strategies Inc.
“I definitely think that big Chinese chip makers will find a way to survive constructing legacy chips and there is a very healthy marketplace for legacy, older model chips,” said Scharre.
“There’s absolutely plenty of money to be made and opportunity in legacy chips versus China’s ability to fabricate essentially the most advanced chips, which, no less than within the near term, they are not going to find a way to do and can take a extremely focused amount of resources and a spotlight and human capital to get to,” he added.
