China’s semiconductor industry is making significant progress, narrowing the gap with Taiwan Semiconductor Manufacturing Company (TSMC) to just three years. This comes despite ongoing US efforts to restrict advanced chip technology exports to China.
A recent analysis by TechanaLye CEO Hiroharu Shimizu revealed that China’s chip capabilities are rapidly advancing. He examined semiconductor circuit diagrams from two Huawei Technologies smartphones: the Pura 70 Pro, released in April 2023, and a 2021 model. The Pura 70 Pro’s chip, Kirin 9010, designed by HiSilicon and mass-produced by Semiconductor Manufacturing International Corp. (SMIC), showcases China’s progress.
Despite US sanctions, SMIC is producing 7-nanometer chips that rival TSMC’s 5-nanometer chips used in Huawei’s 2021 phone. The performance levels of both chips are comparable, demonstrating SMIC’s rapid advancements.
Shimizu highlighted that 86% of the Pura 70 Pro’s chips were manufactured in China. He also stated that US regulations mainly target cutting-edge server chips used for AI and other applications, allowing China to continue developing other types of chips.
China’s growing chip manufacturing capabilities are further emphasized by its increased spending on chipmaking equipment. In 2023, Chinese companies accounted for 34.4% of global purchases, double the figures for South Korea and Taiwan. This surge in spending indicates China’s ambition to become a dominant player in the global chip industry.
The rapid development of China’s semiconductor industry comes at a time of heightened global tensions over chip dominance. The Netherlands is expected to block ASML Holding NV, the sole supplier of extreme ultraviolet lithography machines essential for producing advanced chips, from providing repair and maintenance services to Chinese companies. This move could significantly impact China’s ability to further advance its semiconductor technology.
However, China is undeterred. The country has committed over 43.5 billion yuan ($6.12 billion) to build computing data centers, aiming to boost its data processing capabilities. China is also investing heavily in its semiconductor industry, with a $142 billion commitment that surpasses US spending. This substantial investment highlights China’s determination to secure a steady flow of semiconductors and maintain its position as a technological powerhouse.
