Why did the Communist Party of China put CHIP PRODUCTION at the top of its priorities?

Why did the Communist Party of China put CHIP PRODUCTION at the top of its priorities?

The Communist Party in China has put chip production at the very top of priorities that should ensure it ends its dependence on the technology of economic rivals.

In order to finally fulfill the unfulfilled dream of China becoming a sovereign technological superpower, the ruling Communist Party began to put increasing pressure on e-commerce giant Alibaba to embark on an expensive job of designing its own chips.

If China succeeds in its intention, it could lead to a slowdown in global innovation and global trade, and ultimately make the world poorer, political experts warn.

In November this year, the Chinese online store company Alibaba unveiled a new processor for cloud IT. The Yitian 710 chip will be built into new web servers, and is specifically designed to work with applications that use artificial intelligence and manage data storage. At Alibaba, they focused on designing the Yitian 710 processor, while outsourcing production.

The development of the semiconductor was joined by the Chinese technology giant Tencent, whose business includes social networks and video games, as well as the Chinese smartphone manufacturer Xiaomi. They have pledged several billion dollars to realize a plan to create computer technology, clean energy and other technologies that should bring China enormous wealth and global influence.

Chips in all the appliances we use

Chips are playing an increasingly important role in products from smartphones and cars to medical devices and home appliances. The lack of chips caused by the pandemic has repeatedly stopped car production and led to a shortage of consumer electronics.

The Chinese Communist Party has put chip production at the top of priorities that should ensure it ends its dependence on technology from the United States, Japan and other suppliers that Beijing sees as potential economic rivals.

“Self-confidence is the Chinese nation,” Chinese President Xi Jinping said in a speech in March, calling on China to become a “technological superpower” to protect “national economic security.”

“We must strive to become the world’s leading center of science and the pinnacle of innovation,” Xi added.

For now, Beijing is lonely in the idea of ​​technological independence, and there is a growing chance of rushing towards great disappointment. Namely, analysts and economists believe that, even with large state investments, chip manufacturers and other companies will find it difficult to compete if they separate from global suppliers of advanced components and technology.

If the world were divided into markets with incompatible standards and products, parts made in the United States or Europe may not work in Chinese computers or cars.

“Smartphone manufacturers that have one dominant global operating system and two network standards may need to create unique versions for different markets. That could slow down development, “experts warn.

China imports $ 300 billion worth of chips

Washington and Beijing must “avoid a world split,” UN Secretary-General Antonio Guterres told the Associated Press in September.

For now, China is still heavily dependent on imported chips. Chinese factories assemble smartphones and tablets, but they need components from the United States, Europe, Japan, Taiwan and South Korea. Chips are the largest imports to China, ahead of crude oil, with more than $ 300 billion last year.

China’s rush over chip production began after Huawei, China’s first global technology brand, lost access to U.S. chips and other technology in 2018 due to sanctions imposed by the White House. U.S. officials say Huawei poses a security risk and is helping the Chinese Communist Party spy. The company denies all charges.

Analysts, meanwhile, believe Huawei is close to catching up with Intel, Samsung and Arm in designing top-quality chips for smartphones. But when it comes to making them, Chinese foundries are up to ten years behind industry leaders, such as Taiwanese company TSMC, which produces chips for Apple and other global brands.

China is investing $ 150 billion in chips

China is “significantly behind” in tools, materials and production technology, according to this year’s report by the Semiconductor Industry Association. Beijing’s budget for the development of the chip industry from 2014 to 2030 is 150 billion dollars. By comparison, TMSC plans to spend $ 100 billion over the next three years on chip research and production.

Beijing is reportedly encouraging smartphone and other manufacturers to use suppliers within China, even if they cost more, but officials deny that China wants to separate from the global industry.

Washington stepped up pressure on Huawei last year by banning global foundries from using U.S. technology to make chips. U.S. vendors may sell chips to Huawei, but not for next-generation “5G” smartphones. The EU said it would reconsider foreign investment following complaints that China was violating European technology leadership by buying German robot maker Cook.

The President of the Commission, Ursula von der Leyen, recently announced in the European Parliament that the Commission is working on drafting a European law on chips. MEPs expressed a desire for the EU’s future industrial strategy to help companies overcome the effects of the corona crisis and cope with the digital and environmental transition, and in a resolution adopted on 25 November called on the Commission to revise its March 2020 proposal for a new industrial strategy.

Source: BIZLife

Photo: Pixabay

Source: BIZlife by www.bizlife.rs.

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