US-China tech war: can China’s chipmaking drive save it from US technology embargo?
- Beijing is going all in to back a breakthrough in Chinese semiconductor manufacturing as the nation faces US sanctions on hi-tech goods
- But many newcomers to the industry have little experience and some experts say the ‘whatever it takes’ approach shows tolerance for inefficiency
Over the past year, President Xi Jinping has on multiple occasions described China’s reliance on imported technology with the term Qia Bozi, which translates to being strangled by an adversary. And no industry better reflects this weakness than semiconductor manufacturing – the microprocessors that power the modern economy, from smartphones to cars.
China has spent more than about US$300 billion annually on imported chips over the past two years.
But a rapidly deteriorating relationship with the US is making it increasingly hard for Chinese technology companies to acquire components used in its devices.
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US sanctions on companies like ZTE and Huawei have severely dented production, effectively cutting these companies off from American-made components without a special US government waiver.
On Friday, Washington imposed new restrictions on exports to China’s most advanced manufacturer of computer chips, Semiconductor Manufacturing International Corporation, citing the “unacceptable risk” its products posed if they were used by the Chinese military, according to media reports.