The United States Department of Commerce recently banned China-based ZTE from sourcing components from companies based in the United States for seven years due to its violation of the terms of a sanctions case. This presents a big challenge to ZTE which sources most processors for its smartphones from a U.S. company: Qualcomm. This ban has pushed China to ramp up the development of its semiconductor market, according to a new report.
Reuters reports that China is now looking to ramp up plans to develop its domestic semiconductor market as the stand-off with the U.S. continues. The entire ban debacle has only emphasized China’s reliance on imported semiconductor.
People with direct knowledge of the talks have told the scribe that some Chinese officials have met with industry groups, regulators, and even the massive National Integrated Circuitry Investment Fund to ramp up the already very aggressive plans for developing this sector.
The development of a domestic semi-conductor market is a key priority for the country as part of its “Made in China 2025” strategy. Moreover, it also wants to reduce the reliance of its companies on U.S. suppliers such as Qualcomm and Intel.
Semiconductor development is nevertheless a complex task and merely throwing money at the problem won’t help. However, China has a habit of setting and often even meeting its ambitious timelines so it’s within the realm of possibility for the country to eventually wean its companies off of U.S. chips.