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90 Chinese Firms Collaborate to Grow Local Chips Supply Chain

China is mobilising top tech groups and bodies such as Huawei, SMIC, Xiaomi, Tencent and Alibaba to focus on standards and ways to boost its domestic chips supply chain amid US sanctions

Dozens of China's top tech firms and institutes have been roped in to help the country's boost its chip production facilities and standards. Reuters file photo.


(AF) China is mobilising 90 top tech companies and institutes such as Huawei, SMIC, Xiaomi, Tencent and Alibaba to focus on standards and ways to strengthen the domestic semiconductor supply chain amid ongoing US sanctions that restrict China’s access to advanced foreign technologies. 

The proposal, created by the China Electronics Standardization Institute (CESI), said there is an urgent need to set up a National Integrated Circuit Standardization Technical Committee so as to boost standards that meet the demands of China’s entire semiconductor supply chain, according to a statement published by the Chinese Ministry of Industry and Information Technology (MIIT) on Friday.

CESI said most of the integrated circuit (IC) standards issued by the International Electrotechnical Commission (ICE), an international standards organisation, cannot meet the demand for China’s fast-growing IC industry.

There is also a lack of standards for key technologies and specific applications, CESI said. “For example, many domestic companies have launched their proprietary artificial intelligence chips, but there is no unified standard for their performance evaluation,” the document said, adding that the absence of such a standard increases communication costs between chipmakers and their customers.

China is also in need of technical standards for micro-electro-mechanical systems (MEMS) that can help chipmakers to reduce production costs, increase capacity, and improve efficiency, the document said.

A preliminary list of committee members published by the MIIT include some of the country’s leading semiconductor companies such as SMIC and Huawei’s HiSilicon chip design unit, leading 5G telecom equipment makers Huawei and ZTE, smartphone maker Xiaomi, as well as internet giants such as Tencent and Alibaba.

The standards committee also includes China’s top and third largest telecom operators China Mobile and China Unicom, and top universities such as Tsinghua, known for its clout in the IC industry, and Harbin Institute of Technology (HIT).

The MIIT is soliciting feedback on the proposal until the end of February.


Bid to Cut Dependence on Foreign Tech

The proposal comes as China has doubled down on efforts to reduce the country’s dependence on imported technologies in light of the vulnerability of the domestic semiconductor industry exposed by US sanctions on Huawei and SMIC.

“The integrated circuit industry is a strategic, fundamental and forerunning industry that supports the economic and social development, and safeguards national security… To establish an  integrated circuit industry system with continuously-expanding independent innovation capabilities and scale is of great significance,” the CESI document said.

China’s State Council announced a goal last year to increase the country’s chip self-sufficiency rate to 70%, up from 30%, within five years.

Under export controls imposed last May and tightened in August, Washington barred American technology, such as that used by Taiwan’s TSMC, from being used for designing or manufacturing chips that could end up in Huawei products.

Washington alleges that Huawei has close ties to China’s military and that the equipment it has installed globally could be used by Beijing for espionage.

The US sanctions have hit Huawei’s smartphone business seriously and caused the company to sell its budget smartphone lineup Honor. Huawei fell out of the top five to a sixth position in global smartphone sales in the fourth quarter, according to Canalys research.

China’s largest chipmaker SMIC, which was reportedly developing high-performance chips to meet Huawei’s demand, has also been barred by the US from obtaining semiconductor equipment for advanced technology nodes.

Besides tech firms, 18 Chinese universities with specialties in national defence-related technologies have also been sanctioned by the US, and HIT is one of them.

In June last year, the Bureau of Industry and Security under the US Department of Commerce added HIT to its Entity List over allegations it was using US tech for China’s missile programme. Companies on the list must apply for a licence to import US-made products and services.


• Iris Hong

This page was upgraded on February 15, 2022 to meet style standards.



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Iris Hong

Iris Hong is a senior reporter for the China desk, and has special interests in fintech, e-commerce, AI, and electric vehicles. She began her career in 2006 and worked for Interfax News Agency and for PayPal before joining Asia Financial in July 2020. You can reach out to Iris on Twitter at @Iris23360981


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