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| Will Chinese companies be self-sufficient in microchips? |
After many years of China's efforts to achieve independence from the semiconductor industry, many Chinese companies have begun to take steps to achieve this in 2021, including tech giants such as Baidu and Alibaba and mobile phone manufacturers such as Huawei. And Xiaomi and Oppo, as well as home appliance manufacturers such as Gree, Midea, TCL and Haier.
Although some of the previous companies already have experience in manufacturing microchips, some still represent new ventures in this highly competitive market, allowing them to fulfill their ambitions in manufacturing microchips, especially after the US embargo. Obviously, shutting down the supply chain would be disastrous for them and might lead to Huawei pulling out of the market altogether?
Thousands of Chinese companies joined the competition:
According to the Financial Times, which cites data from China Data Corporation (Qichacha), more than 13,000 domestic transformer manufacturers will be registered in China by 2020, and many of the reasons for this fierce competition for companies to enter this market are the Chinese government. Encouraged. The company is innovative in this area and reduces its dependence on chip imports from foreign companies.
This is due to the fact that the Chinese government knows that innovation in the field of semiconductors is the main factor holding back this effort to become an important country in the field of technology. China is said to be self-sufficient in the field of semiconductors. The state of development of the semiconductor industry is very low, with the value of chips exported at $ 100 billion but imports exceeding $ 300 billion, which is one sixth of the country's total imports.
Although China has proven its ability to produce anything on a large scale, the production of transformers, especially high-quality ones, is still far behind. To change that, China created a joint fund of $ 22 billion in 2014. It is worth $ 29 billion by 2019, but little has been achieved in this area.
Since most of the Chinese companies in this area focus on the design process, the actual manufacturing is still done by outside companies run by large companies (like Samsung and TSMC from Taiwan). However, according to many experts, even large Chinese companies can make progress in the design of manufactured processors, but by combining design and manufacturing processes, it is still impossible to achieve a fully independent national goal.
The ban on Huawei is the main impetus for the Chinese government:
We have found that these measures make commercially reasonable because it is a convenient way for some Chinese companies to remove the risks associated with their supply chain, given the US sanctions that prevent Huawei from using US-based processors to purchase, it is Huawei the right one. Warning. These companies.
Even for companies operating in regions that may not pose a direct threat to the US government, the shortage of global processors starting this year is a reminder that international suppliers will soon be unreliable.
Are Chinese Companies Really Successful?
Baidu (Baidu) is one of the first major Chinese technology companies to enter the processor industry. The company began investing in this area in 2010 and released the first processing in 2018 that can be used in data centers or centralized clouds. Device. Then another processor was introduced in 2019 to power smart speakers in cars and home appliances.
Alibaba, Baidu's most famous competitor, invested a lot of money in this area when it acquired a local processor maker in 2018 and has since launched AI processors. Six other startups in this field have made strategic investments.
Notable Chinese companies have also joined the race, such as: Tencent, which bought a cloud computing company in 2020, while ByteDance is still among the most unclear Chinese companies whose plans are still unclear in this field, however it has recently started announcing its need for employees. They have experience in manufacturing processors.
As for Chinese smart phone manufacturers, Huawei is considered the leader in this field, as it began its own research in designing processors more than two decades ago, by establishing in 2004 a company (HiSilicon) to focus on the processor industry, a decision that has been questioned. Many and no one followed him.
But over the years the company has released a variety of processors that can be used in smartphones or wearables, as it is now the only Chinese company that is seen as a serious competitor in the processor industry globally.
As a result, other companies began to take similar, albeit late, steps, such as: Xiaomi, which began investing in this field in 2014 and launched its first processor three years later, but it is still progressing slowly, just as Oppo started. Its research and investment in this field in 2019.
So what does the future look like for these companies?
Although there is great enthusiasm from Chinese investors to enter this market, driven by the Chinese government's desire not to rely on foreign companies to supply processors, many experts agree that the processor industry requires years of huge investment with a long wait, as it took more than ten years. Until the company (HiSilicon) owned by Huawei gets a fraction of this market, however, it is still not yet able to compete with the dominant companies.
Hence, for the new Chinese companies entering the market for the processor industry, they must invest a lot of money, time and effort to succeed in this highly competitive market that is strongly controlled by major companies counting on the fingers of one hand.