China chip expert warns that self-reliance in semiconductors will be tough, needs stable investment
- Comments come as China seeks to build greater self-reliance in core technologies, such as semiconductors and artificial intelligence, amid increasing US pressure
A prominent Chinese semiconductor expert has said that China’s deep integration with global technology supply chains would make it difficult for the country to develop all of the tech it needs from scratch and that better use of funds is needed to help close the gap with the US.
“We are integrated with the global technology system,” said Wei Shaojun, a professor at Tsinghua University in the department of microelectronics and nano-electronics, at the World Artificial Intelligence Conference (WAIC) in Shanghai on Friday. “The possibility of starting something new from scratch is scant.”
His comments came as China seeks to build greater self-reliance in core technologies, such as semiconductors and artificial intelligence, amid increasing pressure from Washington. The US has been cutting off an increasing amount of US-origin tech to China on national security grounds and as the world’s two-biggest economies clash over a range of issues including trade and human rights.
Washington in May expanded its sanctions against Huawei Technologies by requiring foreign chip makers that use US technology to apply for a license to sell chips to the Chinese telecoms champion. That vastly expanded Washington’s reach by bringing the world’s biggest contract chip maker and key Huawei supplier Taiwan Semiconductor Manufacturing Co (TSMC) under its remit.
Wei said the US has been targeting Huawei to blunt China’s edge in 5G mobile technology, which has the capacity to revolutionise industrial structures.
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Wei said China should seek to better identify what it really needs, and what it does not, and then focus on innovation rather than obsolete alternatives. But he also warned against a complete decoupling of the Chinese and US economies - saying that the US cannot reshore everything and that US tech component suppliers would also be hit hard.
“If we [China] don’t know what we want, it is likely that we will have total chaos,” said Wei, adding the government has lost money in some cases by investing in companies that have falsely claimed they could provide domestic tech alternatives to overseas suppliers. He did not name any companies.
Domestic semiconductor champion Semiconductor Manufacturing International Corporation (SMIC) and AI chip start-up Cambricon Technologies have registered to float on the Nasdaq-like tech-heavy Star board in Shanghai, which is aimed at giving domestic companies easier access to capital markets to support their development.
Chip fabrication technology takes years to develop. While SMIC is the most advanced chip maker in China right now, its 14-nanometer capability still significantly trails behind the world’s leading foundries such as TSMC, which is producing 7nm chips in volumes and recently announced its 3nm process was scheduled for trial production in the first half of next year with mass production expected in the second half of 2022.
Wei also said that China should keep an eye on the global market rather than go all-in for domestic self-reliance only. “We can develop only if we have a leading position in the global market.”
“The problem is that capital and technology development [in the semiconductor industry] have never been in harmony with each other,” said Wei. “We need stable funding from the central government and local government, not short-term or provided in intervals.”
