Tech war: Chinese chip executives put faith in global cooperation despite intensifying US restrictions

At Semicon China, which began in Shanghai on Wednesday, industry veterans highlighted the role that China plays in the global chip supply chain
Chinese chip companies are excited about the progress made by US firm Nvidia, says the chairman of Yangtze Memory Technologies Corporation

Semiconductors

Che Panin Beijing

Published: 7:00am, 21 Mar 2024

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China’s top semiconductor executives attending an annual industry gathering called for tighter collaboration with their global peers, but none of them addressed the elephant in the room: growing US export curbs on advanced chip technology.

Semicon China kicked off in Shanghai on Wednesday amid signs that the US is planning to intensify sanctions against Chinese chip firms. The Biden administration may blacklist several semiconductor companies connected to Huawei Technologies, according to a Bloomberg report published on the same day.

But for veterans in the Chinese chip industry, the country will remain a key part of the international semiconductor supply chain.

Chinese chip companies are excited about the progress made by US chip designer giant Nvidia, founded and helmed by Taiwan-born American businessman Jensen Huang, according to Chen Nanxiang, chairman of China’s top memory chip maker Yangtze Memory Technologies Corporation.

Chen also serves as chairman of the China Semiconductor Industry Association, a 744-member trade group.

A semiconductor wafer on display at Semicon China. Photo: Bloomberg

“China’s semiconductor market belongs to the world, while the world’s semiconductor market also belongs to Chinese companies,” Chan said. He added that speeches made previously by Huang convinced him about the future of the global semiconductor market, which Semicon China projected will top US$1 trillion by 2030 on the back of AI-related chip demand.

Nvidia developed three new data-centre graphics processing units – the H20, L20 and L2 – specifically for Chinese customers after its A800 and H800 GPUs, tailor-made for Chinese clients to comply with an earlier version of US export controls, were banned from being sold to China in October.

While Nvidia is not allowed to export many of its best chips to China, including the new Blackwell GPUs B200 and GB200, the powerful chips raised major attention in the country amid an intensifying AI race with the US.

Neither Nvidia nor Huawei are taking part in this year’s edition of Semicon China.

New developments in AI and electric vehicles will boost demand for chips, with global semiconductor sales expected to grow between 13 to 16 per cent this year to reach around US$600 billion after an 11 per cent drop last year, according to Ju Long, president of Semicon China.

Global sales of semiconductor equipment dropped by a lower-than-expected 1.9 per cent last year, thanks to a 28 per cent jump in demand from China to US$36 billion, Ju said.

China, the world’s largest semiconductor market, relies heavily on imports to meet its demand for advanced chips, tools and software, making the country vulnerable to US sanctions.

The booth of Naura, a Chinese chip equipment maker, at Semicon China. Photo: Bloomberg

The global chip tool market is still monopolised by foreign companies, including Dutch firm ASML and US firms Lam Research, Applied Materials and KLA, which together control 85 per cent of the market, according to Zhao Jinrong, president of Naura Technology Group, a key tool supplier to Chinese foundries.

However, none of the keynote speakers directly mentioned US sanctions or their impact on China’s chip industry.

This year’s Semicon China has brought together more than 1100 exhibitors, most of domestic companies, according to the official list of participating firms.

Semiconductor Manufacturing International Corporation, China’s top foundry, is not an exhibitor this year despite being based in Shanghai.