Today, as trade conflicts between China and the United States intensify, the government decided to accelerate the development of the domestic chip industry, highlighting how far China is from achieving these goals.
According to two informed insiders, senior Chinese officials are increasingly concerned that the efforts to upgrade domestic chip designs have stagnated. After a series of failed acquisitions, the importance of developing the domestic chip industry has become increasingly prominent.
Reducing the quality gap with American chip makers has become a top priority for China.
Reuters reported on Thursday that after heightened trade disputes with the United States, senior Chinese officials met to discuss how to accelerate the development of the chip industry.
Chip development is a key point of the "Made in China 2025" plan. The plan aims to strengthen the country's scientific and technological strength. The Chinese government hopes that domestic chip yield will reach at least 40% by 2020.
But industry insiders say that it is difficult for Chinese chip makers to achieve key goals.
A series of chip-related overseas M & A transactions encountered resistance, which made domestic chip makers in trouble. They are also facing difficulties in attracting talents and overcoming technical obstacles to the development of high-end domestic chips.
A national security committee in the United States blocked China’s acquisition of Xcerra, a US semiconductor testing company, in February. The United States also blocked China’s $1.3 billion acquisition of Lattice Semiconductor’s transactions last year.
“China initially believed that it was not difficult to develop this technology. It could also be acquired from overseas,” said a supplier from a national IC chip company in China. 'Now we don’t think so.'
'The project is very profitable and there is a lot of financial support,' the source said, but 'the problem to be solved is more than originally envisioned.'
The stagnation of domestic chip design met a major turnaround this week. The U.S. government banned U.S. companies from selling components and software to Chinese mobile phone and telecommunications company ZTE. This ban will last for seven years. This move may cut off ZTE's supply chain.
ZTE relies heavily on U.S. chips. ZTE said on Friday that the ban was unfair and threatened the company’s survival.
The results of interviews with six Chinese chip suppliers, business organizations, investors and analysts showed that despite the huge investment and vowed, China still lags behind in the development of high-end chips or ICs. They said that China is at a lower level. The progress of the chip is more.
"The chip has not really been working for years, and the reason is obviously that our system has not formed a key driving force," China Global Times said on Friday.
Spurred by the Sino-U.S. trade dispute and the ZTE case, two people said that the Chinese leadership is now ready to invest in extra money and actively develop domestic self-designed chips.
These people also said that compared to other fields such as financing deals with overseas transactions, the National IC Industry Investment Fund will increase spending on domestic chip designs.
They added that the latest round of financing of the Chinese government’s chip industry Big Fund, which was concluded last month, is estimated to raise US$32 billion in funds. About one-quarter of these new financings will be used for ICs (ICs, IC Design.
One of the major design challenges for Chinese companies is the need to catch up in the short term, and rivals have been developing more sophisticated technologies for decades.
The Ministry of Industry and Information Technology of China and the National Integrated Circuit Industry Investment Fund did not reply to the fax request for comment on Friday.
From Obama to the Trump administration, U.S. regulators have been blocking the acquisition of overseas semiconductor assets by Chinese state-owned companies. They fear that the Chinese government’s strong funding will jeopardize the United States’ leading position in semiconductor technology.
China stated that it is necessary to actively reduce its dependence on foreign chips. In 2016, China’s IC chip import value reached US$ 272 billion, which is higher than that of crude oil and iron ore and primary plastics imports.
These chips are used in smart phones, computers, other electronic devices, and high-end industrial and military products.
Officials said this month that Beijing is seeking up to five years to reduce the pressure on the priority of chips by cutting corporate taxes. Analysts said the company also invested heavily from overseas competitors to snatch overseas resources and engineers.
'Salary engineer in mainland China won five times in South Korea or Taiwan, which is not uncommon,' a work in mainland China, said South Korean chip engineers.
He also said that 'lucrative', if you can provoke other people 'can get very high reward'. Since the matter involves sensitive, the engineer requested anonymity.
According to Jeter Teo, research director at technology research and consulting firm Trendforce in Taipei, China is actively seeking to attract talents, but currently it has less than half of the 700,000 experts needed to become competitive experts in semiconductors. .
Analysts pointed out that although China has managed to attract many semiconductor experts, there are still some experts who have been deterred by the restrictions on work flow in some contracts and the challenges faced by families moving to the mainland.
"These companies will eventually catch up, which is beyond doubt," said the source of the Chinese chip supplier when he talked about Chinese companies.
But 'they must be twice as fast as overseas companies, or they will always be one generation behind,' said the source.