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China speeds up chip R&D

China in recent years has been ramping up efforts to develop core technologies in the domestic chip industry, in an aim to cut its strong reliance on other countries and regions, and that pace was further accelerated in April following the U.S.' ban on component sales to Chinese telecom company ZTE Corp.

The most recent move taken by the Chinese government to bulk up the country's chip-making muscles includes the establishment of a new fund worth more than $47 billion, run by the National Integrated Circuitry Industry Investment Fund Co, the Wall Street Journal reported on Monday.

Meanwhile, Chinese technology giant Alibaba Group Holding said in an announcement it sent to the Global Times that in April it acquired Hangzhou-based C-Sky Microsystems, a manufacturer of embedded chips, an important move in its chip development efforts.

In 2017, the conglomerate also said it would strengthen its technology research input, in an aim to invest more than $15 billion in R&D in the following three years.

Alibaba also set up a global research program in 2017 named DAMO Academy to seek global technological cooperation.

On May 3, Chinese tech companies Lenovo Group, Dawning Information Industry Co (also known as Sugon) and iFlytek also displayed new AI products at a product launch conference held by AI chip start-up Cambricon Technologies Corp.

During the conference, Lenovo released its first server platform equipped with Chinese-designed Cambricon chip-powered MLU100 intelligent processing cards.

Those efforts seem to have paid off. Data released by China's Ministry of Industry and Information Technology (MIIT) showed that in the first quarter of 2018, the value of China's electronic information manufacturing industry grew by 12.5 percent compared with the same period in 2017, faster than the growth rate of all above-scale industries by 6.7 percentage points.

The volume of integrated circuits produced in the first quarter of 2018 reached 39.99 billion, up 15.2 percent compared with 2016's figure, said the MIIT.

A shortcut?

Despite the rapid growth, it is widely believed that due to the time-consuming, slow and costly nature of chip development, China now lags behind the West in most chip-making processes and is unlikely to catch up in the short term.

Japanese financial news outlet the Nikkei Asian Review on May 1 reported that British chipmaker Arm Holdings will cede control of its Chinese operations in a new joint venture (JV) named Arm Mini China, with China set to hold a majority stake of 51 percent.

On Tuesday, Arm confirmed the news to the Global Times via email, stating the new JV has already begun operation, and that it will provide extensive technology support for its Chinese partners throughout the new venture.

Arm will also help localize technology to satisfy the demand in the Chinese market.

"Arm dominates in designing one of the key chip technologies, which others are unlikely to catch up with," a graduate research assistant at Duke University's Department of Electrical and Computer Engineering, who only gave his surname as Yang, told the Global Times on Tuesday.

Major tech multinationals including Apple Inc, Samsung Electronics, Huawei Technologies, Qualcomm, Broadcom and MediaTek all need to license technology from Arm, one of the most influential chip technology providers in the world, to develop chipsets for their smartphones, tablets, wearables and various other connected devices.

"It's possible that domestic chip designers may benefit from the technology transfer, however, the chip-making process is too complicated; designing is just one part of the whole process," Yang said.

Geng Bo, vice secretary-general of the China Solid State Lighting Alliance, agreed with Yang, admitting that it is of course good news for the Chinese chip industry, but that it's too soon to say if the industry will definitely improve just because of the advancement of one specific technology.

Yang said that even with support from foreign firms, knowing how to actually use the technologies independently is vital.

"Having fresh meat is good, but you also need to know how to cook it," he said, adding that after the design phase, the chip-making process is where China lags behind its western rivals.

Experts have also cautioned that if China wants to develop its own technologies in the chip industry, especially those related to national security, it must look at the "chip crisis" from the roots.

AI opportunities

Some domestic industry players, however, say that China has strengths in AI chip development, with many Chinese companies already leading the way in global cutting-edge AI technologies.

"AI is where we may overtake our foreign rivals. Our company is increasing efforts in developing AI chips and has seen some fruit sprout already. For example, our chips have been used in the new retail industry and facial recognition. They have already been applied in self-service stores and airports," Chen Feng, vice president of Chinese fabless semiconductor maker Rockchip, told the Global Times on Tuesday.

Chen's company ranked 20th among the top AI companies in the world in a recent list released by global industry consultancy Compass Intelligence. Meanwhile, Chinese tech giant Huawei ranked 12th.

According to the ranking, U.S.-based Nvidia is still the leading global player, followed by Intel and IBM.

A Chinese AI scientist who works at a U.S. internet company spoke on condition of anonymity to the Global Times on Tuesday, saying that unlike in traditional chip industries, Chinese firms didn't miss the chance of developing AI chips at an early stage, so that is why they are now at a level playing field with their U.S. counterparts.

He also noted that China's large user base ensures ample user feedback during testing processes, important for AI chip R&D.

However, he underscored that whether these AI chips can be defined as "successful" still lies in their sales performance and application scenarios in the future market.

Optimism with caution

"It's hard to predict how long it will take for China to catch up with others, or successfully develop its own core technologies, but for traditional chip sectors, the time will be longer," Geng said.

Nevertheless, Geng remains optimistic about the domestic semiconductor industry, considering China's successful experiences in the LED chip-making industry.

Domestic LED chip development, starting from scratch in 2003, has successfully caught up with its foreign competitors over the past 15 years, and at present, more than 85 percent of lighting products in China have adopted homegrown LED chips, Geng said.

 

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