The looming possibility of greater US chip restrictions, and the worsening of semiconductor supply chain disruptions, has become the dominant topic among Chinese chip experts at an industry forum in Shanghai, where some experts declared “globalisation is dead”.
Industry insiders shared their concerns at the Semicon China conference in Shanghai on Thursday about interruptions to the semiconductor supply chain as Washington reportedly considers further tightening its export controls to slow the flow of AI chips to China. New rules would apply to chips like the Nvidia A800 graphics processing unit.
Wei Shaojun, director of Tsinghua University’s Institute of Microelectronics and an official of the China Semiconductor Industry Association, said China is the biggest victim of deglobalisation in the semiconductor industry because the country expected to be able to tap global resources. “When globalisation is destroyed, [the industry] model has great shortcomings, as China cannot realise the global allocation of resources,” he said.
A ban of the Nvidia A800, which The Wall Street Journal reported on Tuesday Washington is considering, would present both new challenges and opportunities for China, according to Wei. “If the US bans the sale of A800 chips, they are blocking their own way,” he said, adding that the new ban could be a chance for China to accelerate the sourcing and development of alternatives.
Han Di, senior vice-president of Semiconductor Manufacturing International Corp (SMIC), China’s largest wafer foundry, said the country must find new ways to embed itself in the cross-border supply chain.
“The traditional industrial cooperation mode is facing new challenges and opportunities,” Han said. He suggested that China focus on chip materials and components, as well as develop the capability to manufacture advanced chips.
“As the leading integrated circuit company in mainland China, SMIC has always adhered to the attitude of compliant operation, open innovation, and win-win cooperation,” he said.
The US escalated its technology export controls on China last October, further restricting its access to advanced chips and equipment. Under the updated rules, tools that enable Chinese foundries to make chips at the 14-nanometre node level and more advanced are barred from sale to China without US government approval.
Lung Chu, president of Semi China, said the slump in the chip industry has spread to the whole supply chain amid geopolitical tension and an industrial downturn.
Zhang Li, executive vice-president and secretary general for China Semiconductor Industry Association, said China’s chip industry has continued to be affected by the industrial downturn and “unstable trade environment”.
Wang Ning, president of the China Electronics Chamber of Commerce, said at the event that “there’s still a large gap between the technical level of the domestic semiconductor manufacturing industry and that of foreign countries”. He called this a big concern as 5G technology and ChatGPT-like generative artificial intelligence services increase demand for advanced chips.
China lags the US in both technology and production capacity in advanced chips, according to Tsinghua’s Wei, and the problem cannot be solved in the short term despite the country’s willingness to spend lavishly.
“We must aim for the mass production of much-needed high-end chips, which have been banned or restricted by the West,” Wei said. South China Morning Post