China’s Chip Talent Problem Worsens After Layoffs at U.S. Firm Marvell

‘Unplugging from China’
“The worst is yet to come because China is going to be forced to adapt to the new design of globalization that’s emerging. And American companies are essentially at the precipice of a new phase, where instead of plugging into China, they’re unplugging from China,” he added.

Prakash argued that global chipmakers face multiple conundrums. First, they’re forced to take the U.S. side in political disputes because they use American tools and systems. Secondly, they have to deal with multiple regions in the world, including the EU, India and even Saudi Arabia, which want to become global chip hubs.

That leads to their third problem: how to insulate themselves from U.S.-China geopolitical tensions while ensuring profitability in China?

“The way to do that is to build a dual-track strategy, one for within China and one for outside of China. But it’s not just going to be dual-track. There’s going to be far more tracks because multiple countries are there, not just China,” Prakash said.

China Lacks Leverage
The tech analyst said the possibility can’t be ruled out that Beijing may make a drastic move and ban American companies that comply with U.S. sanctions on selling to China.

But Frank Lee, a senior partner of Blue Ocean Capital in Beijing, says such a move would be a “bad idea, which will only serve the U.S.’s purposes,” that is, a U.S.-China tech de-coupling.

He said China has been hit badly by the U.S. sanctions that first cut off chip supplies to China and now limit China’s access to top-tier chip talent.

Lee formerly served as an executive at China’s Lenovo Group, the world’s largest maker of personal computers.

In the short run, he says, China, whose chip sector is still lagging behind its U.S. rival by at least 20 years, will face an uphill battle in fighting a chip war with the U.S.

“The biggest problem is that China doesn’t have too much leverage to retaliate against the U.S. when it comes to chips,” Lee told VOA.

Lee said that China may one day leapfrog the U.S., though, because some Chinese firms enjoy advantages in the development of future devices, powered by 5G or 6G mobile chips.

Citing a Beijing Daily report, Lee said a Chinese firm, Zhongke Xintong Microelectronics, is slated to mass-produce next-generation, super-fast photonics chips in 2023. That would potentially free the company and some of its peers from reliance on extreme ultraviolet machines currently needed to make advanced chips. The EUV machines are made by a Dutch firm, ASML, which is honoring the U.S. sanctions.

Without such a breakthrough, China can neither produce advanced chips nor incubate local talents because it takes years for engineers to master the equipment and the production of advanced chips, said Lin Tsungnan, professor of electrical engineering at National Taiwan University in Taipei.

“Amid heightened U.S.-China tech rivalry, when its access to top-tier talent is limited, China will have a shortage. China can certainly train its local talent, but that’s only possible for mid- to low-end chip talent,” Lin told VOA over the phone.

Joyce Huang reports for VOA from Taipei, Taiwan.This article originated in VOA’s Mandarin Service, and is published courtesy of the Voice of America (VOA).