Tech War: Is Huawei's New Chip a Threat?
“If your tactics sort of pushed Huawei into a corner, they eventually will innovate their way out of these restrictions,” she told DW.
James Lewis, director of the Technology and Public Policy Program at US think tank Center for Strategic and International Studies (CSIS), has similar views — new US restrictions could buy time in the chip race, but will not stop Huawei and other Chinese companies, he said.
Should Taiwan’s TSMC Be Worried?
There are also the experts who downplay Huawei’s breakthrough and doubt that the company can produce the advanced chips at large scale.
Ray Yang, a consulting director of Taiwan’s Industrial Technology Research Institute (ITRI), told DW that “technology needs to be scalable for production” instead of staying at the research and development phase.
He said Taiwan Semiconductor Manufacturing Company (TSMC), the world’s leading chipmaker, holds various patents in mass production while “SMIC lags far behind in this area.”
TSMC is capable of supplying the global market with even more advanced 5 nm chips. The company already hold over 60% of manufacturing capacity for the most advanced semiconductors.
Yang believes that Huawei’s success would be short-lived, probably lasting no more than a year.
“SMIC cannot make 5 nm chips without EUV technology,” Yang said.
Banning Exports a ‘Cold War solution’
Last week, the US Commerce Secretary Raimondo also said no evidence showed that Huawei was capable of producing smartphones with advanced chips “at scale,” adding that Washington has continued to investigate the manufacturing process.
And while anti-China hawks are calling for more sanctions, some experts claimed it would be impossible to pass watertight measures to exclude China from the strongly intertwined global supply chain.
“Trying to block the chips is a very Cold War solution,” said CSIS Director Lewis.
His suggestion is for the US government to “allow chips to go to China” but not the equipment for manufacturing those chips.
This way, as Lewis indicated, would be a win-win situation where the US firms can keep their market share in China while the Chinese brands, such as Oppo and Xiaomi, would still resort to Western chips that have lower price and higher quality.
Without them, Beijing would have a “tremendous incentive” to build its own semiconductor capabilities.
Less Blocking, More Research
Moreover, Beijing has already responded to sanctions by limiting exports of key metals for manufacturing semiconductors. And last month, China announced a new $40 billion (€37.6 billion) fund for domestic chipmakers to reduce reliance on foreign technology.
Eurasia Group’s Lu believed the US has been “focusing too much on blocking competition and not enough on shoring up their own capacities.”
“When you are keeping your competitors three generations behind,” she said, “you are also keeping your own company one or two generations behind.”
Yuchen Li in Taipei is a DW reporter.DW’s Yu-Chun Chou contributed to this report. This article was edited by Darko Janjevic, and it is published courtesy of Deutsche Welle (DW).
