Chip War – US and China
US chipmaker Micron Technology (MU) has accused China’s advanced manufacturing enterprise Fujian Jinhua Integrated Circuit Co (JHICC) of stealing trade secrets 2. Following that, it has been announced that from 29th October onwards American companies are restricted to sell any crucial technology to JHICC (Pham, 2018). With the chip industry now being caught up in the US-China Trade war, this restriction is just one of the outcomes of Trump’s efforts to ban China from getting hold of America’s technology. China, importing three times as many chips as it produces domestically1 and consuming around 38% of the world’s semiconductors2, has realised its vulnerable dependence on foreign companies for high tech components. The Chinese government responded to the reliance by investing billions in homegrown chipmakers such as JHICC and Tsinghua Unigroup. Even the largest e-commerce company in China, Alibaba, has added a new subsidiary – Pingtou Ge – to design semiconductors tailored for AI. However, US accusation against JHICC will likely to further fuel the tension between US and China. Even though China may be “late to the game”, it will continue to create and promote its own supply chain by providing massive subsidiaries for manufacturing and AI 1. Nevertheless, there is still a gap for China to close in the semiconductor industry order to rival organisations such as Google and Microsoft and this will likely require the support of foreign technology.
1 Bergen, M. (2018). The U.S.-China Trade War Means Alibaba Is Producing Its Own Chips. [online] Bloomberg.com. Available at: https://www.bloomberg.com/news/articles/2018-10-25/the-u-s-china-trade-war-means-alibaba-is-producing-its-own-chips [Accessed 14 Nov. 2018].
2 Pham, S. (2018). US strikes at the heart of China’s tech ambitions. [online] CNN. Available at: https://edition.cnn.com/2018/10/30/tech/trade-war-fujian-jinhua/index.html [Accessed 14 Nov. 2018].