World looks to Chi­nese chip in­dus­try

China Daily European Weekly - - Comment - Barry He The au­thor is a Lon­don-based colum­nist. Con­tact the writer at editor@mail.chi­nadai­lyuk.com

Gov­ern­ments around the world are look­ing to China as an af­fir­ma­tive ac­tion model, so that no­body comes up empty-handed

Fol­low­ing news that the World Eco­nomic Fo­rum is look­ing to China for in­spi­ra­tion in tech­nol­ogy pol­icy, there has been much fo­cus on ex­actly how the coun­try’s 1.3 bil­lion peo­ple are be­ing car­ried into the fu­ture.

Fol­low­ing China’s lead, gov­ern­ments can suc­cess­fully im­ple­ment emerg­ing tech­nolo­gies and reg­u­late them in a man­ner that works best for them­selves.

The an­nual con­fer­ence of world lead­ers an­nounced in re­cent weeks that a tech hub will be launched in Beijing, which will al­low of­fi­cials, busi­nesses and lead­ing re­searchers to pool their minds. The idea is to merge ex­per­tise across dis­ci­plines to find out the best ways to de­ter­mine how new tech­nolo­gies can ben­e­fit so­ci­ety with­out dis­rupt­ing it. Tech­nolo­gies such as ar­ti­fi­cial in­tel­li­gence and au­ton­o­mous ve­hi­cles are ob­vi­ous ar­eas that need care­ful thought and clear poli­cies; how­ever the in­cu­bat­ing and quar­an­tin­ing process also ap­plies to ar­eas such as 5G tech­nol­ogy, a de­vel­op­ment on the hori­zon that will have a big im­pact.

The man­ag­ing di­rec­tor of the or­ga­ni­za­tion, Mu­rat Son­mez, told CNBC: “We can’t use 20th cen­tury mod­els for 21st cen­tury tech­nol­ogy. We have a lot to learn from China as well. China rep­re­sents a huge op­por­tu­nity for the rest of the world to see what’s com­ing.” But what ex­actly is com­ing? The gov­ern­ment pol­icy called Made in China 2025 is a strate­gic plan by China to in­crease the do­mes­tic con­tent of core ma­te­ri­als to 40 per­cent by 2020, and 70 per­cent by 2025. This may be seen as a blan­ket up­grade to a va­ri­ety of in­dus­tries and tech­nolo­gies, mov­ing China’s man­u­fac­tur­ing value to world-class pro­duc­tion and in­no­va­tion. At the heart of the plan, China’s ex­per­tise in semi­con­duc­tor and chip tech­nol­ogy has been pur­sued with vigor to turn the coun­try into a world leader.

Self-suf­fi­ciency in semi­con­duc­tor tech­nol­ogy and re­search is vi­tal. Within this sec­tor lies, po­ten­tially, the next big break­through for com­put­ing power. Two of the most pow­er­ful com­put­ers in the world are al­ready Chi­nese, the Tianhe2 and Sun­way Tai­huLight. Chips are the “brains” that power elec­tronic prod­ucts, and de­vel­op­ment in this field will af­fect the fu­ture of ev­ery­thing from house­hold ap­pli­ances and mo­bile phones to ar­ti­fi­cial in­tel­li­gence and driver­less cars.

To fur­ther de­vel­op­ment in this field, China is rapidly be­com­ing self-suf­fi­cient with­out hav­ing to rely upon in­ter­na­tional sup­pli­ers. The gov­ern­ment is pour­ing more fund­ing into this area, and also de­ploy­ing a va­ri­ety of ad­di­tional tac­tics, such as sub­si­diz­ing do­mes­tic chip man­u­fac­tur­ers and of­fer­ing in­cen­tives for for­eign man­u­fac­tur­ers to work in China.

In April, the Min­istry of In­dus­try and In­for­ma­tion Tech­nol­ogy an­nounced the open­ing of new in­vest­ment fund­ing op­tions for chip tech­nol­ogy re­search. First cre­ated back in 2014, the aim of the fund is to build $31.7 bil­lion in cir­cuit chip in­dus­try value.

China’s Semi­con­duc­tor Man­u­fac­tur­ing In­ter­na­tional Corp, as a re­sult, is mak­ing slow but steady progress to be­come a world leader in the field. Cur­rently, the gen­eral rule of thumb is that the smaller the chip, the more pow­er­ful it must be, and there­fore the more ad­vanced the gad­get or ma­chine it drives is ca­pa­ble of be­ing. It is pre­dicted that ma­jor tech­no­log­i­cal break­throughs that will come in the next few decades will be re­liant on smaller and smaller chips. SMIC cur­rently uses 28 nanome­ter pro­cess­ing tech­nol­ogy (a bil­lionth of a me­ter). Coun­tries around the world are re­search­ing ways to shrink chip sizes, with In­tel in the West cur­rently at­tempt­ing 10 nanome­ter man­u­fac­tur­ing.

In May, tech gi­ant Ten­cent climbed aboard the Chi­nese chip cause, vow­ing to ad­vance the Chi­nese semi­con­duc­tor in­dus­try fol­low­ing US sanc­tions on Chi­nese chip pro­ducer ZTE. Point­ing to wor­ries re­gard­ing this year’s trade fric­tions be­tween China and the US, Pony Ma, the chair­man and CEO of Ten­cent Hold­ings, said it will be a cruel re­al­ity if a coun­try falls be­hind due to a lack of in­no­va­tion in key chip op­er­at­ing sys­tem tech­nolo­gies.

The wheels are turn­ing, and gov­ern­ments around the world are look­ing to China to bet­ter un­der­stand the need to pro­tect their own do­mes­tic in­dus­tries and en­sure their long term se­cu­rity through eco­nomic com­pet­i­tive­ness. Af­fir­ma­tive ac­tion is needed by all coun­tries to pre­pare for the fu­ture, and so no­body is an empty-handed player in the fu­ture. In the words of Ma: “Ideas are not im­por­tant in China. Ex­e­cu­tion is.”

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