This Jinping Talk Address shows tech chip crisis in China

Five Chinese companies were recently banned by the United States for allegedly supporting Russia after the invasion of Ukraine, a move that exacerbated China’s crisis in the technology industry. Chinese state media have openly acknowledged that the Chinese semiconductor industry faces many challenges. Communist leader Xi Jinping, who visited China in late June, stressed the need to make significant progress as China’s high-tech industry is shrinking in key areas.

On June 28, the US Department of Commerce placed five Chinese companies on the blacklist of businesses supporting the Russian military and defense industry. Three of these companies are related to chip manufacturing or semiconductor electronic components.

Earlier in the day, US Secretary of Commerce Gina Reymondo warned that Chinese semiconductor companies opposed to Russian sanctions could have dire consequences.

“What if SMIC? [Semiconductor Manufacturing International Corporation] Or have other Chinese-based semiconductor companies been supplying chips to Russia? We will close them and we can, because every chip in the world and in China is made using American tools and software and I think I will do my best if necessary, ”Raymond said at the annual meeting of the Department of Commerce.

Xi Stress Tech Self-Sufficiency

During his inspection tour of Wuhan, Huibei, he visited HGLEzer Engineering Company.

“We need to keep science and technology alive, so dismantling critical technologies is a matter of urgency,” he said.

Speaking about the importance and urgency of the findings, Xi explained that China’s high-tech development is “stuck in the neck” in terms of these critical technologies.

In particular, Chip R&D said it should fully utilize China’s “nationwide system” to accelerate growth. When the regime described the benefits of the proposed economy, the term “nationwide system” was frequently used in CCP propaganda.

The Chinese chip industry is facing serious risks

On June 30, Chinese state media quoted Beijing News as saying that the United States planned to impose another round of sanctions on Chinese chip companies, including Hua Hong Hong Semiconductor, Changzin Memory Technology and Yangz Memory Technologies. In addition, foreign-funded enterprises with Chinese subsidiaries such as South Korea’s Ske Heinex, German Infinion and the United States Texas Instruments could also be sanctioned.

“China’s semiconductor industry has been ‘strangled’ for a long time and is now facing many dangers. In addition to US sanctions, Chinese companies need to increase global political instability, growing international competition and rising commodity prices, according to the Beijing News.

China is the world’s largest consumer of semiconductor, but lacks semiconductor R&D and production capacity.

According to a report by the Boston Consulting Group (BCG) and the SemiaConductor Industry Association (SIA), by 2020, Chinese logic chips and memory chips were less than 1 percent of the world’s market; Electronic design automation is only 3 percent; And special equipment and analog equipment reached 7 percent.

Although China has the potential to produce 16 percent of the world’s ICU, its production is mostly medium to low, two to three generations behind the rest of the world.

A senior Chinese expert in the industry told Beijing News that it would take at least 15 years for the Dutch company ASML to complete the study and set up a high-level lithography system at the same level. ASML

Self-confidence is impossible in the short term

Ji Lin, a Chinese national working in the Japanese industry, told the Epox Times that the high international sanctions imposed on Russia, especially the chip, have weakened Russia’s advanced weapons on the battlefield and plunged its national power into a long-term collapse. International sanctions have exacerbated the CCP’s recent problems.

“China has ordered central government agencies and government-sponsored corporations to replace foreign-branded personal computers with domestic alternatives within two years,” Bloomberg quoted sources as saying.

G. Lin said chip production includes electronics, optics, precision machinery, software simulation and more. No country in the world can have a completely closed product. Even Taiwan’s TSMC, which has been recognized as a world leader in chip production, cannot achieve it, not to mention Chinese companies that are 10 years away from TMSC. Therefore, it is impossible for China to realize its full potential in chip production.

Ellen Wan contributed to this report.