Chip War: How to drive China's technology revolution!

Chip War: How to drive China's technology revolution!

Beijing, China - The semiconductor industry has long since become a key playground in the global technology conflict between the USA and China. The race for dominance in chip production shows how strongly geopolitical tensions influence the market landscape. Especially the most recent US export controls that aim at highly developed chips not only put pressure on the US companies, but also sent the Chinese technology sector to a spectacular catch-up. So reports China Daily Asia that the restrictions of Washington have brought significant losses for US companies.

Among the most famous votes is Jensen Huang, CEO of Nvidia, who describes the export controls as "failure". Before the restrictions, Nvidia had a dominant market position of 95 percent in China, which has now shrunk to only 50 percent. A decline to be recorded, which NVIDIA even caused a loss of $ 5.5 billion in the form of an description of the value. In the meantime, companies such as Huawei are preferring the local manufacturers due to the restrictions and investing in their technologies. In this context, it is also evident that Chinese companies are able to make relevant progress in key technologies such as chips and operating systems through the US restrictions.

The influence of the US sanctions

The US sanctions are not only regarded as short-term hurdles, they mark a profound transformation in the global semiconductor market. E-International Relations emphasizes that the influence of export controls also affects foreign companies that process business with Chinese companies. It becomes clear that China's dependence on imports brings it into a susceptible position, because the market share of Chinese chip companies in the area of ​​global export is just 6.6 percent. This represents a significant disadvantage, while the trade balance in the area of ​​integrated circuits from $ 135 billion rose to $ 279 billion in 2020 in 2010.

At the same time, the Chinese government took measures to promote domestic chip production through massive investments. An example of this is the announcement of $ 145 billion difficult support for rule measures, which are, however, affected by allegations of corruption and inefficient administration. Tsinghua Unigroup, a prominent player, went into bankruptcy in 2021 after several financing rounds. The aim is to increase the self-care rate in chip production to 70 percent by 2025, but China's ambitions are under strong pressure.

Innovations in the Chinese technology sector

The reactions of the Chinese market on printing from the USA are not insignificant. Partnerships and investments made considerable progress. For example, Iflytek cooperates with Huawei to develop AI chips to optimize voice models. Xiaomi also plays an increasingly important role by launching its new 3-nanometer chip, the XRing O1, supported by an impressive R&D budget of $ 27.8 billion until 2030.

But there are more players on this chess board. The Statistics of Patentpc show that the USA lasted a market share of 47 percent in the semiconductor market, while China with only 16 percent in the self-care rate lag behind. Although this deficit is compensated for by extensive investments by the Chinese government, competitiveness is severely restricted by persistent US sanctions. Despite the challenges, Smic, China's leading chip manufacturer, made remarkable progress and was already able to produce 7 nm chips in 2022. The focus is clearly on overcoming technological barriers and a targeted investment strategy to increase efficiency and capacity in your own production.

In summary, the semiconductor industry is in a race that is characterized by geopolitical dimensions and technological challenges. The respective strengths and weaknesses of both countries will continue to be put to the test by 2030. China has ambitious goals and means the potential for exciting development; At the same time, the country is fighting the restrictions and tries to reduce the focal points of its economic dependencies.