BEIJING: While the broader economic fallout of the US tariff policies remains uncertain, China’s semiconductor industry is poised to emerge stronger in the long run, particularly in upstream sectors like chip equipment and components, despite short-term disruptions, analysts say.
Highlighting China’s steady progress in chips for smartphones, artificial intelligence (AI) and automobiles, they said Washington’s bullying tariffs and increasingly tightened chip restrictions will motivate Chinese companies to double down on research and development to achieve technology (tech) breakthroughs and even build semiconductor supply chains independent of US techs.
Jack Gold, principal analyst at the consulting company J.Gold Associates, said “What’s actually happening is that the US government right now is handing China a big win as it tries to get their own chip business going.”
Once Chinese companies are competitive, they’ll start selling around the world and people will buy their chips, Gold added.
The comments came after US chip companies Nvidia and AMD said they need to follow new US licensing requirements for semiconductors exported to China earlier this month.
Nvidia anticipates that the new regulations will lead to a US$5.5bil financial hit, while AMD estimates the rules could reduce its earnings by as much as US$800mil, as reported in filings submitted to the US Securities and Exchange Commission.
Nvidia chief executive officer Jensen Huang also acknowledged, during his trip to Beijing last week, that there are significant business impacts from the tightened US chip export controls.
In the shadow of US export restrictions on Nvidia chips, Chinese tech companies are expanding their cooperation with Huawei Technologies Co Ltd to use the latter’s AI chips for training of large language models.
iFlytek said that its proprietary deep reasoning model Spark X1 is the industry’s only large language model trained entirely on China’s domestic computational infrastructure.
It is also partnering with Huawei’s AI chip research team to create better domestic computing solutions for AI training, and that Spark X1 demonstrates significant improvements across general AI tasks, including mathematics, coding, logical reasoning, text generation, language understanding and knowledge-based question and answer.
Semiconductor research company ICwise said in a report that Washington’s tariffs could accelerate China’s shift toward non-US chips, squeezing US players. — China Daily/ANN
