With Huawei’s chip breakthrough, China has won a battle, if not the war
- Washington’s efforts to restrict Chinese access to critical technologies seem to have failed, with the launch of Huawei’s new 5G smartphone
- What is striking about the Mate 60 Pro is that besides its primary 7nm processor, many of its auxiliary chips are also made in China
The US-China chip war serves as a microcosm of broader geopolitical and economic tensions. In the technological rivalry between the United States and China, particularly in the semiconductor industry, the US has attempted to disrupt global supply chains with the primary aim of hindering Chinese progress.
What is striking about the Mate 60 Pro is that besides its primary 7nm processor, many of its auxiliary chips are also made in China. Understandably, this progress towards self-sufficiency has been celebrated as a geopolitical triumph by the Chinese state media.
In August, Biden went one further, signing an executive order that will prohibit certain US investments in sensitive technology, including semiconductors.
For Beijing, what could be an exit strategy from this chip war? China is currently prioritising supply chain security and reducing its reliance on US technology.
However, the problem with such national planning, which includes incentives to build innovation parks and subsidies for tech companies, is that it could lead to corruption and hinder genuine innovation. In the long run, it could even result in lower-quality products and less global competitiveness.
The US-China chip war has widespread economic ramifications. Not only does it have an effect on the financial performance of major tech companies, it also has considerable influence on global trade dynamics, the resilience of supply chains and matters of national security.
Why Beijing should thank the US for its space and chip industries
For now, the 7nm chip in Huawei’s new phone is an emblem of China’s unwavering determination to achieve self-sufficiency. Despite Washington’s endeavours to curtail Chinese access to advanced chip technology, Chinese entities like Huawei and SMIC appear to have made substantial headway in chip design and manufacturing. This aligns with China’s ambition to become a semiconductor powerhouse.
At this point in the chip war, and in the wider competition between the US and China, the fact that China is advancing steadily and emerging as a formidable player in semiconductors should give the US pause.
Saher Liaqat, a graduate student of international relations from the School of Politics and International Relations, Quaid-i-Azam University, is a research fellow at the Hanns Seidel Foundation, Pakistan