Are China’s investments in semiconductors all for naught? US expert says China is at a crossroads
- The desire to cut reliance on foreign chips and become a global leader in the semiconductor industry has never been stronger in Beijing than it is now
China’s heavy dependence on foreign chips has worried Beijing for decades.
Just like Washington thinks including Chinese vendors in its telecoms network could pose a national security threat, Beijing also believes that a reliance on Western chips is a sword hanging over the head of its booming digital economy.
The desire to cut reliance on foreign chips and become a global leader in the semiconductor industry has never been stronger in Beijing than it is now. The urgency around the issue has increased amid an escalating trade war and after Chinese telecoms giant Huawei Technologies was banned in May from buying American-made technology – meaning chips mostly – which it relies on to expand its global empire.
After several failed attempts, China now has a more solid foundation in tech, a better talent pool and huge market size. It is in a better position to take on the US, which still leads the global semiconductor industry, taking half of the US$400 billion in global annual sales of chips.
With massive government funding, focused industrial policies and government targets, can China pull it off this time?
Jimmy Goodrich, vice-president of global policy at the Semiconductor Industry Association, a US trade group representing some of the biggest names in the industry from Intel to Broadcom, spoke about some of these issues with the Post recently.
