Chinese industry is a shell. Even the Chinese despise him
The Middle Kingdom flexes its muscles and boasts about its achievements, but the reality is brutal. Chinese semiconductors are not competitive.
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As reported by DigiTimes, despite the intense efforts of the government in Beijing to become independent from foreign suppliers, Chinese enterprises are still reluctant to use domestic semiconductors. This applies to both basic components and advanced systems used in HPC and AI tasks.
China has old lithographs and low production capacity
There are many reasons for this state of affairs. First, China still has limited possibilities in the production of the most advanced integrated circuitswhich makes it difficult to compete with global leaders from Taiwan, South Korea or even Japan and Europe. This applies to both lithography and processing capacity.
Moreover, the lack of mandatory regulations forcing the use of domestic components means that companies prefer proven products available in large volumes from renowned foreign producers.
The situation is especially visible in the world of artificial intelligence. American sanctions limited access to top solutions such as NVIDIA H100 and H200, a Chinese counterparts are still not up to foreign standardsamong others due to underdeveloped software. As a result, companies often use or try to use stripped-down versions of Western systems obtain them through unofficial channels.
Some cloud service providers from China they bypass sanctionsrenting data centers outside the country or using intermediary companies. It also remains a problem capacity of Chinese factories to mass produce enough efficient AI chips. This applies even to the largest manufacturer – SMIC.
Although some progress can be seen in niche segmentse.g. in the production of DDIC (Display Driver IC) systems, the scale of changes remains small. Despite growing experience in mature technologies, Western and Asian competitors still dominate both in terms of quality and production capacity.
According to the report, without government intervention or major advances in domestic technology development, the pace of change will not accelerate. Chinese companies still have access to modern, although sometimes limited, American equipment, which reduces the incentive to reach for domestic solutions.
