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The US 'embargo' may wake Chinese technology giants up

The US 'embargo' may wake Chinese technology giants up

. 4 min read

The ban from the US could become a driving force for China to develop technology on its own, avoiding relying entirely on the West.

Technology has become the main point of the trade war between the two powers of the United States and China. From there, the US alliance is outstanding. Especially in the array of chips and components needed for smartphones, computers, and mobile networks.

MEMS accelerometer sensor or field-programmable gate array (FPGA) might be strange to users. However, this is an essential factor in this battle. So far, China has lost in all aspects, despite investing billions of dollars.

China is determined to implement the "Made in China 2025" plan. Photo: VCG.
China is determined to implement the “Made in China 2025” plan. Photo: VCG.

The US side has many advantages, but Huawei’s “ban” can make Chinese people awake. As a result, they can make double efforts to close the technology gap, according to the Washington Post.

Chinese wants to be technological independent

According to The WashingtonPost newspaper, President Trump’s actions, though based on national security concerns, could bring many disadvantages to the US. That inadvertently creates new competitors in the industry dominated by Western companies like Qualcomm, Intel, ARM, and many others.

China wants to promote the process of “semiconductor independence.” Experts believe that the country is implementing that ambition, regardless of whether the war of trade ends or not.

“In any case, the Chinese government and companies will try to replace the US supply chain gradually. They certainly do not want to stand at the playground where Americans always win, ”said Stewart Randall, head of Intralink semiconductor consulting firm in Shanghai.

These sensors are smaller than a grain of sand, sold for 10-50 cents. Low prices do not mean they are easy to produce. American, German, French, and Japanese companies create advanced laboratory processes with high security.

The components in the micro-accelerometer make them impossible to separate and copy. If you want to compete, a company will have to develop the technology from the beginning or somehow get a detailed diagram of the assembly process.

“If they cannot buy parts from the US company, they will be in trouble,” Stacy Rasgon, a senior US semiconductor analyst, Bernstein Research.

A worker assembles phone components at a factory in Dongguan, China. Photo: AFP.
A worker assembles phone components at a factory in Dongguan, China. Photo: AFP.

Great and less complicated microprocessors can be developed based on computer simulations. Nevertheless, MEMS chips are too small for that to be done. The construction process takes many years with a series of large and small trials.

Experts say that a “development cycle” is usually 18 months. Therefore, if a company wants to reach a certain range, it must go through 3 cycles.

China remains behind the level of the US

In the past, Chinese semiconductor companies had no incentive to develop advanced technologies like accelerometers. Because they could get them from the West at super low prices. Now, with the US ban, they will have to design the chip themselves.

“They will eventually reach that level, but not overnight,” said James A.Lewis, a technology policy expert at the Washington-based Center for Strategic and International Studies.

Nevertheless, others don’t think China will take much time. Mobile Experts founder at Los Gatos, analyst Joe Madden recalled the late 1990s while working for a company that owns a proprietary mobile network. Hence, they wondered whether to sell products to Huawei.

US sanctions against Huawei made China awake. Photo: Getty.
US sanctions against Huawei made China awake. Photo: Getty.

According to Madden, the company predicted that Huawei took only about 3 years to create its own version. But in fact, the Chinese giant takes only two months.

The core components of electronic devices mostly own technology from the United States and allies. However, Madden said that they could be copied by Chinese people somewhere. Huawei will have to “temporarily use” uncompleted products and accept their smartphones to become more cumbersome.

“I think the process will take 2 to 3 years. Anyway, they can accept disadvantages in terms of performance and battery life for some time. But in the end, they will catch up with us one day, “Madden warned.

Field-programmable gate array

Another important component is FPGA, short for “Field-programmable gate array,” a type of large integrated circuit that uses the structure of a logical element array. So, users can program.

It is used in the most advanced 5G base stations. Huawei bought this device from Xilinx, based in the US, to navigate wireless traffic and perform specialized operations to help 5G technology operate. FPGA is appreciated for flexibility.

Building FPGA integrated circuits can be very complicated. A single block contains billions of transistors, all of which can be reprogrammed with computer software. But there, there is no standard coding language for GPUs. The manufacturer must create custom software compatible with each transistor.

It is a challenging task even for big names like Intel. The California giant had to pay $17 billion to buy Altera’s FPGA technology in 2015.

Hadi Esmaeilzadeh, professor of computer science at the University of California, San Diego, said that China would face many challenges to complete an IC that the software is perfectly compatible with such hardware.

There are signs that Huawei and the Chinese government had planned for a bad scenario to happen. From 2015 onwards, the country’s leadership launched the “Made in China 2025” plan to promote independence in the development of a wide range of critical industries, including semiconductor manufacturing.

Meanwhile, the British giant said “farewell” since the end of May. It is time for the Chinese to stand up by their own technology instead of relying on the US and the West.