World looks to Chinese chip industry
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.”