INSUBCONTINENT EXCLUSIVE:
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Professor Yue is working on next generation computer chips
On a university campus on the
outskirts of Hong Kong a group of engineers are designing computer chips they hope will be used in the next generation of Chinese made smart
phones.Patrick Yue leans back in his chair in a coffee shop on the campus, sporting a Stanford University t-shirt
He is the lead engineer and professor overseeing the project.His research team designs optical communication chips, which use light rather
than electrical signals to transfer information, and are needed in 5G mobile phones and other internet-connected devices.He tells me about
the challenges China faces in developing a world-beating computer chip industry."I actually think the actual designers will be as big a
bottle neck as the manufacturing
We don't have nearly as many research institutes and industry bases to train the designers," he says.His department is part-funded by
Huawei, the Chinese communications and telecom giant at the centre of an international political storm
In May the US added Huawei to a list of companies that US firms cannot trade with unless they have a licence, blaming security
concerns.Rivals is a season of in-depth coverage on TheIndianSubcontinent News about the contest for supremacy between the US and China
across trade, tech, defence and soft power.Read more here.Many industry observers fear that the US-Chinese trade war, risks unravelling the
global technology supply chain.In particular, China relies on overseas companies for computer chips (or semiconductors), the tiny devices
used in everything from consumer electronics to military hardware
"Politically everything can be used as a bargaining power," says Mr Yue."If these companies and countries start to hold back on technology
then everyone will get hurt
It's not good from a technological point of view," Mr Yue says.China has made no secret of its desire to become self-sufficient in
The nation is both the world's largest importer and consumer of semiconductors.It currently produces just 16% of the semiconductors fuelling
But it has plans to produce 40% of all semiconductors it uses by 2020, and 70% by 2025, an ambitious plan spurred by the trade war with the
US.Image copyrightGetty ImagesImage caption
China's President Xi Jinping wants to end the country's dependence on
foreign chip suppliers
In May 2018 China's President Xi Jinping met with the country's leading scientists and engineers,
calling for specialists to work towards self-reliance in the production of core technologies.That meeting was just a month after the US
government banned US firms from selling components to ZTE, China's second-largest maker of telecom network equipment.The ban highlighted to
China's leaders that the nation's tech boom was dependent on foreign technology
In October this year, in its latest bid to help wean the nation's tech sector away from US technology, the Chinese government created a
$29bn (£22m) fund to support the semiconductor industry."There is no question that China has the engineers to make chips
The question is whether they can make competitive ones," questions Piero Scaruffi, a Silicon Valley historian, and artificial intelligence
researcher who works in Silicon Valley.More Technology of Business"Certainly, Huawei can develop its own chips and operating systems, and
the government can make sure that they will be successful in China
But Huawei and other Chinese phone makers are successful also in foreign markets, and that's a totally different question: Will Huawei's
chips and operating systems be as competitive as Qualcomm's and Android? Most likely not
At best, it will take years before they are," Mr Scaruffi adds.Mr Scaruffi estimates that China could be as many as 10 years behind the
leading producers of high-end computer chips
The majority of chips made for high-end electronics are manufactured by specialist foundries like the Taiwanese Semiconductor Manufacturing
It produces more than 70% of chips designed by third party companies
Just securing the best machinery needed to make high-end chips is difficult."To start out with equipment, its very high precision equipment
You need to print very fine features
The equipment that is needed to have this kind of technology is controlled by a few companies in the world," says Mr Yue
He believes that Chinese technology is three to four generations behind companies like TSMC
China lacks the industry experience to manufacture high end chips, he says
But he believes that companies like Huawei are already competitive when it comes to designing chips.Image copyrightGetty ImagesImage
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Huawei has been put on a US government blacklist
Where does this leave the tech giant Huawei?Mr
Yue argues that Huawei is trying to replicate the successful business models of firms like Samsung, which produces its own computer chips -
rather than trying to fall into line with Beijing's industrial ambitions."You can almost view them as an integrated company with the
expertise of what Apple or Qualcomm has," says Mr Yue.Li Changzhu is a lifelong employee of Huawei and president of the company's handset
He joined the company 23 years ago as a fresh graduate and has watched it grow into the international tech giant
He claims that the goal of companies like Huawei is simply to satisfy consumer needs
"We are open to use other vendors chipsets
Every year we purchase a lot of chips from Qualcomm
We use the best chipsets to satisfy our customers," he says sitting on the side of a tech conference in Macau, a semi- autonomous southern
Chinese city.Image caption
China aims to supply 70% of its demand for chips by 2025
Growth in the
semiconductor industry is typically driven by disruptive new technologies
In the late 2000s the introduction of smartphones boosted demand for the tiny integrated circuits that control everything from memory to
Bluetooth and wifi.But today China's ambition to dominate sectors such as artificial intelligence and 5G is expected to further ramp up
demand for high-end chips.Industry analysts like Mr Scaruffi question China's ability to truly innovate
"Every Chinese city wants to build its own Silicon Valley
It tends to be more driven from the top
Silicon Valley had a big advantage, that it was very far away from the political power," says Mr Scaruffi
He believes that China's technological success lies in the implementation of technology rather than its creation."If your metric is how many
people use smart phones to go shopping then China wins big time
But if your metric is Nobel Prize winners, then China is losing badly
China of course has been very successful in implementing technology in a way that dramatically alters society," he says
