Source: Reuters

Samsung, the South Korean manufacturer said it has appointed Young Hyun Jun effective immediately, shifting him from the role as Head of its Future Business Planning Unit. The move is likely aimed at catching up in the market for top-end chips used in artificial intelligence such as high bandwidth memory (HBM) chips, an area where Samsung has fallen behind rivals such as SK Hynix, analysts said.

“This is a preemptive measure to strengthen future competitiveness by renewing the atmosphere internally and externally,” Samsung said in a statement.

Samsung’s market share in DRAM chips used in tech devices reached 45.5% in Q4 2023, according to data provider TrendForce. It lags, however, in the niche but increasingly important HBM chips segment where SK Hynix controls more than 90% of the mainstream HBM3 market. HBM3 is a fourth-generation HBM standard currently the most used for AI chipsets like those made by industry leader Nvidia.

Jun, 63, led Samsung’s memory chip business from 2014 to 2017 after working on the development of DRAM and flash memory chips. He was also the CEO of battery arm Samsung SDI from 2017 to 2022, overseeing a U.S. electric vehicle battery joint venture with automaker Stellantis .

“We expect him to overcome the chip crisis with his management know-how he has accumulated,” Samsung said.

Kye Hyun Kyung, who led the semiconductor division since 2022, will swap into Jun’s prior role as Head of its Future Business Planning Unit. Replacing such a high-ranking position in the middle of the year is unusual given most personnel changes at Samsung typically take place in the beginning of the year, analysts said.

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According to DIGITimes, the rising penetration of new energy vehicles (NEV) in China, China-based automakers, such as BYD, SAIC, Nio, and Li Auto, are developing automotive chips to strengthen resilience and reduce reliance on other suppliers. SAIC said it would invest RMB6 billion (US$830 million) to form a joint venture with partners, with SAIC holding a 99.8% stake in the JV, to engage in developing automotive chips and accelerate import substitution.

Following efforts for automotive chip localisation, including setting up funds, investing in integrated circuit (IC) design houses, and forming joint ventures (JV) with partners, SAIC targets to bring the proportion of locally-sourced chips to 10% in 2023, up from 7% in 2022, and plans to reach 30% by 2025. SAIC has also set a target to complete the vehicle validation of 100 domestically produced chips by the end of 2023.

In addition to SAIC, other companies such as BYD, Geely, NIO, and Li Auto are jumping into the bandwagon to develop their automotive chips in various ways, including investments. In March 2023 , SiEngine, co-funded by Geely’s subsidiary ECARX and Arm China, completed its third round of financing within a year.

Automakers have introduced SiEngine’s first chip, made on TSMC’s 7nm node. The company is developing its next-generation chip for smart cockpit, autonomous driving, and CPU for vehicles.

Zhejiang Jingnen Microelectronics, a start up incubated by Geely, completed its second round of financing in June 2023. In March, it announced the successful tape-out of its first auto-grade IGBT chip and plans to introduce its product into several cars in 2023. 

As competition intensifies in the Chinese new EV market, major automakers are increasing their investments in automotive chips to ensure supply security. Still, due to the high requirement for technology and capital for auto-grade MCU and analog chips, the local sourcing rate is relatively low in China.

Sources indicated that except for a few automaker giants, like Tesla, which can set up separate businesses for designing chips, most carmakers would have to acquire IC design capability either through investments or joint ventures. Besides, automakers also face challenges such as prolonged timelines for investment returns, chip standardisation, economies of scale, and cost issues.

Navigating Quality Issues

While titans such as Tesla have the means to start a design facility as mentioned prior, the others would have to content with joining forces with fellow players. That is the catalyst for quality issues. UK based media outlet, The Register reported China is getting concerned with its quality issues.

The article noted China wants its manufacturers to become more reliable, after finding that three key sectors – machinery, electronics, and automobiles – are not at levels that match global standards of excellence. It added the nation’s Ministry of Industry and Information Technology on 4 July 2023 published an interpretation and implementation guide for recently released “Opinions on Manufacturing Reliability Improvement.” 

The guide opens with the observation that Chinese manufacturing has made significant progress, but “there is still a gap between the reliability of my country’s manufacturing industry and the advanced level of foreign countries.”

“Advanced semiconductor materials, and automotive-grade automotive chips” are named as fields in which Chinese firms do not operate at levels matching the best the world has to offer. Some of the gap is caused by Chinese authorities and managers not being up to speed on how to monitor and manage quality processes.

Beijing wants those gaps bridged, so that China moves from middling sophistication to high-end work. To get there, China wants consideration of tech elements such as human-computer interaction, and the software used by manufacturers. Authorities always want products to be more reliable in all phases of their lifecycles – even unto eventual disposal.

The Ministry vows to run 100 demonstrations of how to improve reliability, and for at least 1,000 enterprises to have shown tangible results by 2025. A second phase of action, due to end in 2030, should see China fully adopt reliability standards across ten key products.

Administrators are also expected to be ready to enforce reliability standards by 2030. Electronics was selected as a target industry due to its vital role providing components to others, and also because Beijing feels it is sufficiently mature to respond to a call for improved reliability.

The automotive industry was named due to the importance of transport and the obvious negative impacts that flow from sub-optimal products. Machinery was nominated given its enormous and important industry that China thinks needs to reach an improved level of operation.

Aiming Beyond Good Enough

With ambitious goals set for improving reliability, China aims to make significant strides in enhancing the quality of its products by implementing reliability standards across key industries. The Ministry’s commitment to conducting demonstrations and driving tangible results is a promising step towards achieving their targets by 2025.

By extending the efforts until 2030, China intends to fully adopt reliability standards and enforce them, particularly in the electronics, automotive, and machinery sectors. Recognising the semiconductor’s need to catch up to global reliability standards may ease concerns in nations that have imposed sanctions on China, while other countries reliant on Chinese goods may contemplate the value they receive. Only time can tell if her mission to transcend “good enough” will be successful — though it is an obvious long shot now.

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The United States imposed a sweeping set of restrictions, including a measure to cut China off from chips made with US technology anywhere in the world. In March, the Guardian noted the Netherlands confirmed is joint agreement with the US and Japan to restrict the export of advanced chip-making technology. The strategy resulted in China’s chip imports plunging 23% in Q1 2023, compared with the same period in the previous year.

At a SEMICON China 2023, Wei Shaojun from Tsinghua University and Vice-Chairman of China Semiconductor Industry Association indicated “suppression” against the semiconductor industry will definitely halt the pace of globalisation, and lead to fragmentation of global supply chain.

As Chinese semiconductor industry development pursues the typical separation between design, manufacturing and packaging, the “real biggest challenge” confronting Chinese semiconductor industry, according to Wei, is to change this familiar model.

China’s Position Still Unsteady

Compared to integrated device manufacturer (IDM) dominated countries like the US, Europe, Japan, and South Korea, China’s IDMs remain small. Data gathered by DIGITIMES Research indicated, in 2022 Chinese IDMs only accounted for approximately 2% of global IDM revenues. In contrast, American IDMs accounted for approximately 42%. 

This was confirmed by Wei, who noted China’s relatively small domestic semiconductor industry: in terms of chip manufacturing. Despite the high compound annual growth rate (CAGR) of the sector, non-Chinese companies operating in China still plays an outsized role.

Since 2016, the average CAGR of Chinese semiconductor manufacturing companies owned by Chinese investors is 14.7%. However, that of non-Chinese wafer manufacturing companies from Taiwan, South Korea, and other countries is higher at 30%. 

Citing data, Wei noted China’s contract manufacturing capacity is also severely insufficient. 2021’s findings showed the monthly production capacity for 12-inch wafers is only around 440,000 units. From the demand perspective, there is a gap of one million units as the required capacity is 1.5 million units.

Stepping Up On Innovation

Lastly, Chinese semiconductor industry also faces a serious lack of innovation. Analysis of the 62 chip design companies listed on China’s STAR Market reveals an average gross profit margin of only 34.2%.

According to Wei , this indicates that Chinese products are still not good enough to secure a high gross profit margin. That might have just be the smoking gun explaining China’s laggard position in the semiconductor race.

In terms of R&D, Wei pointed to Chinese semiconductor industry’s under investment: in 2022, the combined R&D expenditure of the 62 chip design companies listed on STAR Market is only US$2.91 billion.

“In other words, if we concentrate this US$2.9 billion to develop 5nm chips, we would be able to produce approximately 10 chips,” said Wei, “This level of R&D investment is far from sufficient.”

Chen Nanxiang, CEO of leading Chinese memory maker YMTC, also made similar observations. Chen remarked 80% of China’s semiconductor market is attributed to foreign companies, and similarly, 60% of the US market is also reliant on non-US companies.

“This implies that China’s market not only belongs to its domestic semiconductor industry but also to the global market. The same is true for the United States,” said Chen.

As many countries are targeting high-end chip manufacturing capabilities, the YMTC CEO was also concerned that there may be an oversupply of high-end chips in a few years, while low-end products may be neglected, leading to potential shortages. Where would that leave China then?

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The accuracy of the optical measuring devices from Bruker Alicona is achieved by using Advanced Focus-Variation technology. Based on this technology, the Bruker Alicona optical 3D measuring systems by Cairnhill Metrology close the gap between classical dimensional metrology and surface roughness measurement.

The core competence is the measurement of dimension, position, shape and roughness of complex components of different shapes, sizes and materials. Furthermore, measuring steep flanks with angles larger than 87° is not a problem at all, and even surfaces with strongly varying reflection properties and greatly varying roughness are measurable.

Advanced Focus-Variation also allows measuring samples with smooth and highly polished surfaces. Plus, users benefit from repeatable, robust and stable measurements, also in production. 

Where tactile methods fail, Bruker Alicona comes into the game with its optical 3D measurement technology. Users can measure both GD&T features and roughness parameters robustly, accurately, traceably and in high repeatability by using only one optical sensor. The product portfolio includes high-resolution optical measuring solutions for the shop floor and the laboratory.

Highest Precision For Electronic Components

In the field of chip and electronics manufacturing, the use of optical 3D measurement technology gained importance. The miniaturization of electronic components has made it difficult to measure and inspect their geometries with traditional measurement methods.

Bruker Alicona’s measurement solutions allow for the precise measurement of the dimension, position, shape and surface roughness of electronic components, such as PCBs, microchips, and MEMS devices.

Read more here —–> https://t.ly/rIfAU

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According to the transcript posted by Shanghai Jiao Tong University, Huawei founder Ren Zhengfei said Huawei had over the past three years replaced the 13,000 components with domestic Chinese substitutes and had redesigned 4,000 circuit boards for it products. He said production of circuit boards had “stabilised”.

The remarks, which Reuters could not independently verify, provided a window into Huawei’s efforts to bounce back from U.S. trade restrictions. Since 2019, Huawei, a major supplier of equipment used in 5G telecommunications networks, has been the target of successive rounds of U.S. export controls.

Those controls cut off both Huawei’s supply of chips from U.S. companies and its access to U.S. technology tools to design its own chips and have them manufactured by partners. The Biden administration last year also banned the sale of new Huawei equipment in the U.S.

Ren made the remarks in a talk to Chinese technology experts on Feb. 24, the university said. The university posted the transcript on its website on Friday. A U.S.-based Huawei representative did not immediately respond to a request for comment on Friday.

Nonetheless, it is known that Huawei’s products are still sold in the United States through third party retailers — a sign that Huawei has somewhat cemented its position in the country with quality products notwithstanding the prevailing geopolitical tensions.

Ren said Huawei invested US$23.8 billion in research and development in 2022, and “as our profitability improves, we’ll continue to increase R&D spending.” The founder said the company had built its own enterprise resource planning system, called MetaERP. To launch in April, it will help run its core business functions, including finance, supply chain and manufacturing operations.

On defending its premium position in the US market, Huawei’s move in developing its own parts can only strengthen its position domestically and globally. The icing on the cake is its successful weaning off its reliance on US-made Qualcomm chips. Should the chips turn out to be on par with that from Qualcomm, it will continue to fuel demand with or without the sanctions. 

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Both stocks have fallen out of favour as investors fretted over slower sales of PCs, smartphones, and other devices in a post-pandemic market. Fears of a recession and rising interest rates exacerbated that sell-off.

Over the past 12 months, TSMC’s stock declined nearly 40 percent, while Intel’s stock tumbled almost 50 percent. Should contrarian investors buy either of these out-of-favour chip stocks as the bulls rush for the exits?

How TSMC And Intel Became Competitors

TSMC and Intel both operate their own foundries. TSMC doesn’t manufacture its own branded chips — it’s a third-party contract chipmaker that only manufactures chips for “fabless” clients like Apple, AMD, and Nvidia. Intel primarily uses its foundries to manufacture its own CPUs, but it’s been gradually accepting more orders from other fabless chipmakers.

For many years, Intel stayed ahead of TSMC in the “process race” to manufacture smaller, denser, and more power-efficient chips. But that changed after TSMC, with the financial backing of Apple, started to install ASML’s pricey extreme ultraviolet (EUV) lithography systems in 2014. EUV systems are used to etch circuit patterns on the world’s smallest silicon wafers, but Intel stuck with its lithography machines instead of buying ASML’s systems.

Intel subsequently struggled to manufacture smaller and denser chips, and it eventually fell behind TSMC in the process race in 2020. As a result, AMD, which outsourced its production to TSMC, pulled ahead of Intel with more advanced CPUs. Apple, which previously installed Intel’s CPUs in its Macs, also replaced those aging chips with its own TSMC-produced silicon.

Intel is now buying more EUV systems, but it will need to pour tens of billions of dollars into that expansion to catch up to TSMC and AMD. For now, TSMC — and its top clients like AMD and Apple — remain at least two chip generations (in terms of node size and transistor density) ahead of Intel in the process race.

Cyclical Headwinds Vs Existential Challenges

TSMC generated 41 percent of its revenue from the smartphone market in the third quarter of 2022. Another 39 percent came from the high-performance computing (HPC) market, 15 percent came from the Internet of Things (IoT) and automotive sector, and the rest came from other markets.

One near-term headwind for TSMC is the slowing growth of the smartphone market. Apple, its largest customer, has been struggling with severe supply chain disruptions in China. Inflationary headwinds and longer upgrade cycles are also preventing consumers from buying new phones.

Another major headwind is the decelerating sales of high-end PCs in a post-pandemic market. AMD, Nvidia, and even Intel (which outsources the production of its discrete GPUs to TSMC) are major customers for TSMC’s HPC segment, and all of these chipmakers are bracing for a tough cyclical slowdown in 2023. TSMC might offset some of that deceleration with the growth of its smaller auto and IoT divisions.

Analysts expect TSMC’s revenue to only rise 7 percent in 2023 as its EPS declines 5 percent. That would represent a significant slowdown from analysts’ forecasts for 43 percent revenue growth and 69 percent earnings growth in 2022.

TSMC’s headwinds are cyclical, but Intel’s challenges are arguably existential. Intel’s share of the PC CPU market plunged from 82 percent to 63 percent between the fourth quarters of 2016 and 2022, according to PassMark Software, as it lost ground to AMD’s cheaper and more advanced CPUs. Intel’s server business also remains heavily exposed to the unpredictable macroeconomic headwinds for big enterprise and data center customers.

Intel generated 53 percent of its revenue from its client computing group (which mainly serves the PC market) in the third quarter of 2022. Another 27 percent came from its data center and AI division, while the rest came from other types of chips and services. Its core businesses will likely face macro and competitive headwinds in 2023 and beyond.

Intel believes it can catch up to TSMC in the process race by 2024, but that’s a tall order that will require heavy spending and some support from government subsidies. For now, analysts expect Intel’s revenue to decline 15 percent in 2022 and slide another 4 percent in 2023. They expect its earnings to plunge 64 percent in 2022 and drop 4 percent in 2023 as the company continues to chase TSMC.

The Valuations And Verdict

Both stocks look cheap: TSMC trades at just 12 times forward earnings, while Intel has a slightly higher forward price-to-earnings ratio of 13. But at their current valuations, TSMC is a much better buy than Intel because it’s growing faster, it’s better diversified, and it remains far ahead in the process race. Intel isn’t doomed yet, but it has a lot of work to do before it can be considered a viable turnaround play, or even a stable blue-chip dividend stock. 

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Source: Bloomberg

“We’re completely on track, we do quarterly milestones, and according to those milestones we’re ahead or on track,” Intel Vice President Ann Kelleher, Head of Technology Development, said.

Intel Chief Executive Officer Pat Gelsinger vowed to regain leadership in production technology, formerly one of the foundations of the company’s decades of dominance in the US$580 billion industry. Kelleher’s team is trying to make up for the chipmaker’s delay in delivering a manufacturing technique that arrived five years later than originally promised. The group is accelerating the effort to introduce new processes at an unprecedented pace.

If Gelsinger’s plan succeeds, Intel stands to reverse market share losses to rivals such as Advanced Micro Devices Incorporated and Nvidia Corporation. Better production will also allow Intel to attract customers for the CEO’s attempt to take on Taiwan Semiconductor Manufacturing Company (TSMC) and Samsung Electronics Company in the growing business of contract manufacturing — making semiconductors for other chip companies.

Kelleher said Intel is taking a far more pragmatic approach than in the past, building in contingency plans to make sure there are no more major delays. It’s also relying more on equipment vendors for help, rather than trying to do all of the work itself, she said.

“Intel in the past had high walls in terms of not sharing,” said Kelleher, who has been with the Santa Clara, California-based company for more than 30 years. “We don’t need to lead in everything.”

Intel is trying to improve its manufacturing capabilities as it struggles with declining revenue and a steep drop in demand for personal computers, which generate more than half its sales. In October, the company said actions including headcount reductions and slower spending on new plants will result in savings of US$3 billion next year, with annual cuts swelling to much as US$10 billion by the end of 2025.

Manufacturing chips with better production — with improvements designated in smaller numbers of nanometers, or billionths of a meter — makes factories more efficient and improves the ability of the electronic components to store and process data in a more efficient way.

Intel is currently mass-producing 7-nanometer chips. It is ready to start manufacturing 4-nanometer semiconductors and will be ready to move to 3 nanometers in the second half of 2023. Originally a measure of the main part of a transistor, the nanometer term is now more loosely applied to signify how advanced companies are relative to their rivals.

Kelleher, who worked her way through Intel’s ranks after starting in its factories, has a prosaic view of the marketing terminology used to compare technology capabilities across the industry.

“Seven measures nothing, we might as well call it ‘George,’” she said.

While terms like 7 nanometer may have little relevance to the actual world of chip production these days, Kelleher is committed to restoring Intel’s luster. She said her budget is secure and won’t be affected by the company’s cost cuts.

Currently, TSMC and Samsung are widely credited with having overtaken Intel in production technology. The Taiwanese company pioneered the business of making chips for others, and both companies are now central to the global supply chain. That includes making components for companies including Apple Incorporated., Qualcomm Incorporated. and Amazon.com Incorporated, as well as direct Intel rivals such as AMD and Nvidia.

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Reporting by Tom Sims; Editing by Josie Kao

(REUTERS): The economics ministry had been examining the sale to competitor Silex, a Swedish company that is a subsidiary of Chinese group Sai Microelectronics. The deal “will most likely be prohibited” in a “new development”, Elmos said on Monday.

Until Monday, the ministry “had indicated to the parties that the transaction most likely will be approved”. Elmos said that it would examine further steps “after receiving the final assessment”.

Silex did not immediately respond to a request for comment outside of normal business hours.

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By Rishi Iyengar, Foreign Policy

After four years of watching Donald Trump inflict flesh wounds on China with his ineffectual trade war, U.S. President Joe Biden appears to have found the jugular. The goal is the same, but this knife is sharper—and could set back China’s tech ambitions by as much as a decade.

The target: semiconductor chips, especially the cutting-edge variety used for supercomputers and artificial intelligence. New export controls announced by the Biden administration this month prohibit the sale of not only those chips to China but also the advanced equipment needed to make them, as well as knowledge from any U.S. citizens, residents, or green card holders.

The chips, wafer-thin and the size of a fingernail, underpin everything from our smartphones to the advanced weapons systems that the United States specifically called out in its filing announcing the export restrictions. Perhaps more important—and this is where the U.S. curbs will hurt China the most—they are indispensable to the technologies of the future, such as AI and self-driving cars, as well as virtually every industry from pharmaceuticals to defense.

“You can pick a cliche—people talk about it as the ‘new oil’ or whatever,” said Raj Varadarajan, Managing Director and Senior Partner at Boston Consulting Group whose research has focused on the semiconductor industry. “But it’s there in everything, it’s pervading everything, and that’s one of the reasons it’s become such a flashpoint.”

China has set out lofty ambitions for its technology sector, with several government plans over the past decade setting out targets such as self-sufficiency in high-tech manufacturing by 2025, global leadership in AI by 2030, and global industry standards dominance by 2035. The latest U.S. broadside is aimed squarely at that “Made in China” sign.

“I think this is part of also signaling to China that we are not just going to resolve to give China global leadership in some of these key areas,” said Daniel Gerstein, a senior policy researcher at the Rand Corp. who previously served in the U.S. Department of Homeland Security’s Science and Technology Directorate. “We don’t want to lose and become beholden, if you will, to Chinese approaches.”

The semiconductor industry is the cornerstone of that strategy, and China has made significant strides in the recent past. The country now accounts for 35 percent of the global market, according to the Semiconductor Industry Association (SIA).

But that figure reflects the final sales of finished chips to electronics companies, many of which have large manufacturing operations concentrated in China. The more high-tech and critical parts of the process, such as chip design and initial production, are still dominated by the United States.

And while China can hold its own at the lower end of the spectrum and the production of older-generation chips, it still lags behind in the cutting-edge research, design, and advanced technology that the Biden administration’s export restrictions target. Those goals have now likely been pushed back several years.

A significant reason for China’s vulnerability, as well as its painstaking effort to achieve independence, is how interconnected the global semiconductor supply chain is. Chips will often be designed in one country; fabricated in another using machines from a third; tested in a fourth; and finally assembled and placed into electronic devices in a fifth—sometimes with a few more countries and steps in between.

And many of those countries have concentrated their strengths and capacities in certain parts of that process, creating potential bottlenecks that can easily be exploited. For instance, the SIA estimates that there are “more than 50 points across the value chain where one region holds more than 65 percent of the global market share.” And 92 percent of manufacturing capacity for the world’s most advanced chips is concentrated in Taiwan; the remaining 8 percent is in South Korea.

The United States is trying to hedge its bets on that front as well, passing the CHIPS and Science Act this year, which provides US$52 billion in incentives—most of it for companies that set up chip factories on U.S. soil—and hundreds of billions of dollars more to further shore up its research and development capabilities. Biden has been doing the rounds in upstate New York this month, touting the impact of the act, including at an IBM plant in Poughkeepsie (a day before the export controls were announced) and a Micron facility in Syracuse.

For the United States, building up its own manufacturing ecosystem is a fail-safe. For China, it has rapidly become an absolute necessity.

“This is an effort that is going to take hundreds of billions of dollars and an incredible amount of engineering talent and energy to recreate a semiconductor supply chain that doesn’t involve U.S. technology,” said Jordan Schneider, a senior analyst at the Rhodium Group. “This supply chain is so globalised, but also so specialised, that at any step in it there’s only a handful of firms in the world that can do it, and if you’re sort of locked out of any one of these steps, then you can’t make chips.”

There are still some unanswered questions, including how the restrictions will be implemented in practice. In many cases, they give companies the option to apply for licenses to use and sell U.S. technology.

“It’s not clear that permission will be denied. It’s very possible that permission will be given, and so it’ll just delay and slow down some things,” Varadarajan said.

The other big question is whether and how China might hit back. Beijing has slammed what it calls “abuse” of export controls and warned that the restrictions could ultimately “backfire” on Washington, but its response so far has been a distant cry from the tit-for-tat tariffs that were a hallmark of Trump’s trade war.

With semiconductors specifically, the vast gap between U.S. and Chinese technological capabilities means Beijing doesn’t have much with which to retaliate. While China accounts for a significant portion of mature node chips—older, larger semiconductors that are not as cutting-edge but are used in products such as cars—it is not indispensable, and production can likely shift elsewhere without much disruption.

“If the U.S. bans selling semiconductors to China, and China says [it is also] going to ban semiconductors, there isn’t much in terms of things that they make over there that they can ban equivalent to proportional response,” Varadarajan said.

China, in any event, is backed into a corner. Any move Beijing makes at the moment to cut itself off from the global supply chain could hit the country’s employment and exports, both of which it can ill afford with a current economic growth rate of 3 percent—far lower than government forecasts—and no easy way out.

Actions within China in the weeks after the U.S. export controls were announced betray the uncertainty within of what to do next. The Chinese government reportedly held emergency meetings with the country’s top semiconductor firms to assess the impact of the restrictions. The Financial Times reported that one of the leading firms, Yangtze Memory Technologies Corp., has already asked several American employees to leave.

China will be forced to double down on its years long effort to build its own semiconductor ecosystem and might just achieve its goal of becoming self-sufficient in the long run. But in the short term, there’s likely to be pain.

“The Chinese companies are going to have an enormously difficult time trying to push past these limits without U.S. technology, but any effort to do so just to get to a 2022 level will probably take a decade or more,” Schneider said. “And even with all the effort, it’s not clear that they would succeed.”

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(REUTERS): The ministry summoned executives from firms including Yangtze Memory Technologies Co (YMTC) and supercomputer specialist Dawning Information Industry Company to attend closed-door meetings, the report said.

This month the Biden administration passed a sweeping set of export controls aimed at slowing Beijing’s technological and military advances, including sales restrictions on certain advanced chips and chip equipment tools.

Experts have said the new rules will have a broad impact, slowing China’s efforts to develop its own chip industry and advance commercial and state research involving military weapons, artificial intelligence, data centres and many other areas that are powered by supercomputers and high-end chips.

According to the Bloomberg report, many of the participants at the meetings argued that the U.S. curbs spell doom for their industry, as well as China’s ambitions to untether its economy from American technology.

YMTC, Dawning and the industry ministry did not immediately reply to Reuters’ requests for comment. On Sunday, Chinese President Xi Jinping called for his country to “win the battle” in core technologies in his full work report as he kicked off the once-every-five-years Communist Party Congress.

Experts have said the work report could signal an overhaul in Beijing’s approach to advancing its tech industry, with more state-led spending and intervention to counter U.S. pressures.

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