China strives to achieve technology self-sufficiency

To help turn China into a self-sufficient “technological superpower,” the ruling Communist Party is pressing the world’s largest e-commerce company to take on the complex and costly task of designing its own computer integrated circuits, a business unlike any other on Alibaba. I did the group before.

Three-year-old T-Head microchip development unit introduced its third processor in October, the Yitian 710, to Alibaba’s cloud computing business. The Chinese giant claims that at the moment it has no plans to sell the chip to third parties.

Other start-up chip developers, including social media, gaming giant Tencent and mobile phone brand Xiaomi, are pledging billions of dollars in line with official plans to create computing, clean energy and other technologies that could build China’s wealth and global influence.

The chips are a top priority in the ruling Communist Party’s marathon campaign to end China’s dependence on technology from the United States, Japan and other suppliers that Beijing sees as potential economic and strategic competitors. If the campaign succeeds, business and political leaders fear it will discourage innovation, disrupt global trade and make the world poorer.

“Self-reliance is the foundation of the Chinese nation,” President Xi Jinping declared during a speech in March. Then he called on China to become a “technological superpower” to safeguard “national economic security.”

“We should strive to become the world’s leading scientific center and a high ground for innovation,” Xi said.

However, Beijing could suffer a costly disappointment. Even with significant official investment, entrepreneurs and analysts believe chip makers and other companies will have a hard time competing if they separate themselves from global suppliers of components and advanced technology, a goal no other country pursues.

“It’s hard to imagine a country that rebuilds all of that and has the best technology,” said Peter Hanbury, industry specialist at Bain & Company.

Beijing’s plans are stoking tension with Washington and Europe, which sees China as a strategic competitor They complain of technology theft from them. They have responded by restricting your access to the tools you need to improve your industries.

UN Secretary-General Antonio Guterres said Washington and Beijing must “prevent the world from falling apart.” Associated Press.

China’s factories assemble the world’s phones and tablets, but they need components from the United States, Europe, Japan, Taiwan and South Korea. Chips are the product that China imports the most, ahead of oil, with a value exceeding $300,000 million last year.

China accounts for 23% of the world’s chip production capacity, but only 7.6% of sales.

The first tranche of the T-Head, the Hanguang 800, was announced in 2019 for AI systems. The second, the XuanTie 910, is for self-driving vehicles and other functions.

In November, Tencent Holdings, which operates the messaging service WeChat, announced its first three chips for artificial intelligence, cloud computing, and video.

Beijing has said it will spend $150 billion from 2014 to 2030 to develop the chip industry, but even that’s a fraction of what world leaders spend. TSMC plans to spend $100 billion over the next three years on research and manufacturing.

China is trying to gain experience by hiring engineers from TSMC and other Taiwanese producers. Taiwan, which Beijing claims as part of its territory and which it has threatened to attack, has responded by imposing restrictions on job advertisements.

Beijing is encouraging phone makers and other manufacturers to turn to suppliers within China, even if the cost is higher, but officials deny that China wants to separate from global industries.

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