Self-reliance drive gets impetus from IT industrial estate
China is making steady progress in developing home-grown chips and operating systems to reduce its reliance on foreign technologies amid United States sanctions, domestic industry experts say.
At Tongming Lake IT City, a hi-tech industrial estate in Beijing’s southern economic zone Yizhuang, efforts to wean the country from foreign core technology are in full display in an area larger than 500 football pitches.
Since it began development in 2019, Tongming Lake IT City is now the base of several prominent domestic tech firms.
They include chip design firms Loongson Technology and Sophgo Technologies, cloud computing and server vendor Inspur Group, Huawei Technologies’ big-data solutions unit Kunpeng, cybersecurity solutions start-up KML Technology Group and operating system specialist UnioTech Software.
During a media tour organised by the Beijing government last week, Tian Ye, a manager at UnioTech, told visitors that the company’s products were “breaking the monopoly of [Microsoft’s] Windows”.
UnioTech, a company formed from a Chinese community of Linux enthusiasts, is leading domestic efforts to replace foreign operating systems on personal computers (PC) and servers. Its Linux-based PC operating systems have become popular among government clients for offering alternatives to Windows.
China’s drive to phase out foreign systems in military and state organs has been going on for years, and it has gained momentum with the state-led campaign Xinchuang, which aims to develop local alternatives to replace foreign chips, systems, databases and software.
It also aims to build the domestic tech sector into an industry with an annual output of 100 billion yuan (HK$108 billion) next year. Despite those efforts, analysts say major hurdles are faced by the semiconductor sector in the country.
China ran about 10 to 15 years behind the West in lithography technology – a key step in chip manufacturing – although the gap in processing techniques was smaller, said Dan Hutcheson, vice-chairman of Canadian semiconductor industry research firm TechInsights, in a webinar last week.
Russel Wu, general manager at networking gear start-up TML and previously with Intel, said China lagged foreign competitors in product quality and chipmaking precision, but that the country would strive to be self-sufficient if it needed to be.
“We choose to collaborate whenever collaboration is possible, [but] if we can’t, we go our own way,” Wu said. “It may be slower but we won’t die.”
He added that the Xinchuang campaign offered a chance to create China’s own ecosystem so that local start-ups could rely on each other and grow together.
UnioTech’s operating systems have been configured to work with most processors made by major domestic central processing unit (CPU) makers and brands, including Huawei, Hygon Information Technology, Phytium Technology, Loongson, Zhaoxin Semiconductor and Sunway.
Most of those companies have been blacklisted by the US commerce department, meaning their access to global foundry services has been blocked. As a result, they depend on Chinese chip manufacturers to produce their CPUs.
UnioTech said as of last year, that its systems were installed in 6 million home-grown computers, with a 40,000-strong customer base comprising entities such as government departments, financial institutions and state-owned firms.
The central government in March vowed to raise spending on technological and scientific development by 10 per cent this year, to about 370.8 billion yuan. The additional financial support comes despite the sluggish economy, which has been dragged down by debt and an ailing property market.
Some foreign businesses operating in China are already feeling the heat from local efforts to switch to domestic alternatives.
VMware, a cloud computing firm recently acquired by Californian chip giant Broadcom, trimmed the size of its sales team in China last year, partly because of state-run companies shying away from its database services, according to people familiar with the situation, who declined to be named discussing private business matters.