Design: Chinese chips on horizon

The situation is unlikely to improve any time soon.

For, Chinese smartphone vendors are itching to compete in the high-end market. So, chip shortages will likely get more acute, experts said.

To be fair, Chinese labels such as Xiaomi and Huawei did anticipate this problem and made efforts to develop their own alternatives. For instance, Xiaomi unveiled its first in-house chip in March.

Way back in 2004, Huawei started its research and development of chips. It can now supply a number of mobile processors for its high-end devices, though it still leans a bit on Qualcomm for the “system on a chip” technology.

Chinese chip maker Tsinghua Unigroup is working on a $30 billion domestic memory chip production complex in Nanjing, Jiangsu province. But it is still several years away before the plant begins to produce chips.

Roger Sheng, a senior chip analyst at research firm Gartner Inc, said: “In-house

Each company’s annual shipments need to reach 10 million units to cover the cost ...” Roger Sheng, Gartner analyst

design and manufacture of chips for specific devices would help deliver differentiated product performance. It can also boost smartphone vendors’ bargaining power with suppliers.

“But heavy resources need to be poured into the (chip) segment. Each smartphone maker’s annual shipments need to reach 10 million units to cover the cost of developing tailor-made chips.

“It’s a risky business. Missteps would add weeks to the product launch schedule. Money alone won’t guarantee success. But it’s a path that Chinese players have to take if they want to rise to supremacy in the high-end market.”