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Electronics: China wants to reduce its dependence on foreign chips at all costs | News Today

Electronics: China wants to reduce its dependence on foreign chips at all costs
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Would China be ready to invade Taiwan to get its hands on TSMC, the world’s leading manufacturer of microprocessors? A priori absurd, the question was nevertheless, in December 2020, the subject of an article by The Diplomat, an English-language magazine little known for its sense of humor. Good news: the answer is no. First, because even though Xi Jinping believes that the “Reunification” can not be “Left to future generations”, the Chinese president does not seem to favor the military option. Secondly, because no one can predict what material damage would result from an armed conflict with Taiwan. Finally, because, in all cases, TSMC is so dependent on its Western and North American suppliers in particular that, quickly, a TSMC that has become Chinese would be no more than a shadow of itself.

Despite everything, the question has the merit of pointing out the strategic importance of microprocessors, which are to electronics what oil is to industry. However, China is sorely lacking in these two fuels. In value, its imports of electronic chips ($ 378 billion in 2020, or just under 326 billion euros) are even significantly greater than those of black gold (176 billion).

Without the American chips, neither Alibaba nor Huawei would have become global giants. China produces 36% of the world’s electronics, but Chinese companies supply only 7.6% of the semiconductors sold worldwide. And again, they are not the most efficient. Semiconductor Manufacturing International Corporation (SMIC), the main Chinese chip maker is said to have “Four to five years behind TSMC’s technology, despite nearly two decades of investment”, earlier this year noted a note on the Chinese microprocessor industry published by the American think tank Brookings Institution, entitled Lagging goal motivated (“Late but motivated”).

Out of conviction and out of necessity

Fact, “Technological independence” is at the heart of many of Xi Jinping’s speeches as well as of the 14e five-year plan (2021-2025). Out of conviction and out of necessity. The American sanctions taken by the Trump administration, in particular against Huawei and SMIC, could only comfort the Chinese leaders to accelerate the localization of their industry. A revolution in this sector at the forefront of international cooperation.

“Despite harsh rhetoric on both sides of the Pacific, US semiconductor companies and their Chinese counterparts are now working together on hundreds if not thousands of project designs and joint technology development efforts,” notes Christopher Thomas, the author of the Brookings note. For the moment, the United States welcomes the delay that China continues to have on world leaders, estimated at ten or fifteen years depending on the market segments. But the meetings on this topic at the White House (the last one took place on September 15) and the reports to Congress show it: the United States knows that, in this area too, China is working hard to catch up. .

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Remon Buul

Chairman of the board of directors responsible for organizing and developing the general policy of the website and the electronic newspaper, he is interested in public affairs and in monitoring the latest international developments.

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