China will not take easy path in chipmaking despite eased trade tensions with US

By Xiao Xin Source:Global Times Published: 2019/9/28 19:03:40

Photo: VCG

Alibaba's semiconductor subsidiary Pingtouge unveiled its first chip on Wednesday, fleshing out the nation's chipmaking reputation which has largely revolved around the self-sufficiency push from an embattled Huawei this year.

Pingtouge's first artificial intelligence (AI)-dedicated chip, known as the Hanguang 800, has given China's chipmaking endeavors a boost, but was met with a tepid response from domestic equity markets. 

Chip concept stocks listed on domestic exchanges retreated 3.31 percent on Wednesday before plunging 5.14 percent the next day, according to statistics from the Hithink Flush Information Network. In comparison, the flagship Shanghai Composite Index registered a 1 percent drop on Wednesday and a 0.89 percent decrease on the following day. 

The considerable correction is believed to be linked to news that Qualcomm has resumed its supplies to Huawei. 

The US chip giant has continued selling some products to Huawei which were exempted from the ban on US sales to the Chinese tech company, Caixin reported after Tuesday's trade. 

The report also noted that Qualcomm has applied for sales permission in the longer term.

Speculation has emerged that the supply resumption may dent China's intention to forge a chipmaking path, widely understood to be an arduous and costly mission. Will China choose the easy path so that the US can continue to hold it over a barrel? This is the question that needs to be answered.

With Alibaba, a non-traditional player in the arena, making a mark with the new AI chip it claims to be the most powerful worldwide, it is clear that its chipmaking endeavors will return positive results. 

According to the e-commerce giant, the Hanguang 800 can identify 1 billion merchandise photos in five minutes, a task that other chips need one hour to complete.

As China's prominence in the AI sphere continues to rise, the nation is expected to hone its chipmaking skills considerably, which could lead to a breakthrough in its pursuit of self-sufficient core technologies. 

The stock correction is normal investor behavior centered on cashing out before the weeklong National Day holidays. The chip sector had been advancing since mid-August before investors recently started to make gains. 

However, eased tension, as witnessed by Qualcomm's latest move, will not put the brakes on China's chip self-sufficiency drive.

The author is a reporter with the Global Times. [email protected]

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