US chokehold pushes China chip self-sufficiency up the agenda

US chokehold pushes China chip self-sufficiency up the agenda

When China’s Communist party delegates meet on Monday to thrash out their economic plan for the next five years, the semiconductor industry will be high on the agenda.

Beijing’s 30-year push to build a homegrown chip sector has taken on a new sense of urgency as Donald Trump’s administration tightens its chokehold on China’s leading technology groups.

Washington has barred companies worldwide from manufacturing chips for Huawei, the telecoms business, in what is a potential death sentence for its affiliate HiSilicon, China’s largest chip designer. The US has also restricted American companies from supplying Semiconductor Manufacturing International Corporation, China’s most advanced chipmaker, with the machines needed for making chips.

Experts and industry executives believe that even with China set to pour another $1.4tn into its technology sector by 2025, this targeted US effort to strangle the country both on supplies of semiconductors and the means to fabricate them makes Beijing’s push to develop the domestic chip sector much more difficult.