Chinese chip sector ‘may overtake Western peers’

By Li Xuanmin Source:Global Times Published: 2018/4/22 19:48:39

New uses, sectors can boost nation’s efforts, market position

An employee works at an encapsulation production line of Tongfu Microelectronics Co in Nantong, East China's Jiangsu Province in February 2018. Photo: VCG

Chinese technology companies are investing heavily in all aspects of the chip-making sector, giving them a chance to surpass their Western peers in "new emerging tracks" such as artificial intelligence (AI) and the Internet of Things (IoT), industry insiders and company executives said over the weekend.

There has been widespread discussion in recent days of the need for China to vigorously develop its own semiconductor sector, after the US government banned the sale of US chips and other components to Chinese telecom company ZTE Corp.

Domestic technology giant Alibaba Group announced over the weekend that it had acquired Hangzhou-based embedded chip maker C-Sky Microsystems, an important move in its chip-making efforts, according to a statement Alibaba sent to the Global Times on Sunday. Terms of the deal were not disclosed.

Alibaba has previously invested in network chips, smartphone chips and IoT chips, involving five companies: Cambricon, Barefoot Networks, Deephi Tech, Kneron and ASR Microelectronic, the statement noted. The group also set up a professional team to conduct research and development of AI chips. 

"The headwinds we now face can only be tackled by scaling up investment in research and development. But there is something we can change, and that is the future," an industry insider told the Global Times over the weekend, speaking on condition of anonymity.

For China, making a breakthrough in the chip industry will be difficult now, he added, citing foreign dominance of semiconductor research and production as well as trade rules developed over the past decades.

Zhang Jianfeng, Alibaba's chief technology officer, noted that in some new industries such as AI and the IoT, domestic chip-makers are at the same level as their US rivals.

"Technologies in chips made around the globe have not yet matured to support the new industries, and that's where the chance for Chinese companies lies," he said.

Within several years, demand for new types of chips will surge, Zhang said. He forecast that 20 billion to 30 billion smart devices will require new chips, a market that will be "hundreds of times" larger than the current one.

"Producers with enough data and application scenarios will have an edge in chips' core competiveness," he said.

Chinese companies' gaps with their Western peers are shrinking thanks to the injection of capital into the integrated circuit sector and government support policies, Chen Feng, vice president of Chinese fabless semiconductor maker Rockchip, told the Global Times on Sunday.

"An increasing number of self-supplied chips are now being installed in cellphones and high-end electronic devices made in China," Chen said.

Diao Shijing, director of information technology at the Ministry of Industry and Information Technology, said on Saturday that China's chip industry has made "significant progress and is now catching up with the technology of the world's first-echelon companies, particularly in design capacity," the China Media Group reported.

The market is also expanding rapidly, with domestic chips being adopted from daily life and the industrial sector to AI and smart cars, Diao noted.

From 2013 to 2017, the industry achieved an average annual growth rate of 21 percent, five times that of the global market, according to Diao.


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