Chinese President Xi Jinping (習近平) is renewing his years-long push to achieve technology self-sufficiency by tapping a top deputy to shepherd a key initiative aimed at helping domestic chipmakers overcome US sanctions.
Chinese Vice Premier Liu He (劉鶴), Xi’s economic czar whose sprawling portfolio spans trade to finance and technology, has been tapped to spearhead the development of so-called “third-generation” chip development and capabilities, and is leading the formulation of a series of financial and policy supports for the technology, people with knowledge of the matter said.
It is a nascent field that relies on newer materials and gear beyond traditional silicon, and is an arena where no company or nation yet dominates, offering Beijing one of its best chances to sidestep the hurdles slapped on its chipmaking industry by the US and its allies.
The sanctions, which emerged during former US president Donald Trump’s administration, have already smothered Huawei Technologies Co’s (華為) smartphone business and would impede longer-term efforts by chipmakers from Huawei’s HiSilicon Technologies Co (海思半導體) to Semiconductor Manufacturing International Corp (中芯國際) to migrate toward more advanced wafer fabrication technologies, threatening China’s technological ambitions.
The involvement of one of Xi’s most-trusted lieutenants in China’s chip efforts highlights the importance accorded by Beijing to the initiative, which is gaining urgency as rivals from the US to Japan and South Korea scramble to shore up their own industries.
Xi has long called upon Liu to tackle matters of top national priority, making the Harvard-educated adviser the chief representative in trade negotiations with the US as well as chairman of the Chinese Financial Stability and Development Committee, where he leads the charge to curb risks in the nation’s more than US$5 trillion financial sector.
Last month, he spearheaded a meeting of a technology task force that discussed ways to grow next-generation semiconductor technologies, according to a government statement.
Liu, 69, has led the country’s technology reform task force since 2018, is also overseeing projects that could lead to breakthroughs in traditional chipmaking, including the development of China’s own chip design software and extreme ultraviolet lithography machines, one of the people said, asking not to be identified as they were not authorized to speak to media.
About US$1 trillion of government funding has been set aside under the technology initiative, part of which would be used by central and local governments to jointly invest in a series of third-generation chip projects, people with knowledge of the matter said.
Top chipmakers and research institutes have submitted proposals to the ministries of science and information technology, all vying for a place in the national program and a share of the financing.
The Chinese Ministry of Science and Technology is slated to inject 400 million yuan (US$62.1 million) into some key “strategic electronics materials,” including third-generation chips, according to a government document.
Even moonshot chip programs are in line for government funding. The state-backed National Natural Science Foundation of China has pledged financial support for dozens of exploratory research programs, ranging from ultra-low power consumption to the development of a flexible chip that can collect and transmit nerve signals, as Beijing seeks to overcome “computing bottlenecks” when Moore’s Law — the industry standard for predicting the pace of chip improvements — finally stops working.
Several subsidiaries of China Electronics Technology Group Corp (中國電子科技集團) and China Railway Construction Corp (中國鐵建) — organizations already sanctioned by the US — are among the state-backed firms backing the effort, one of the people said.
The task of coordinating that sprawling program falls to Liu, who has to keep track of the relevant resources and drive the national strategy to help China achieve chip independence.
“For our country, technology and innovation is not just a matter of growth,” Liu told a three-story auditorium packed with China’s top scientists in a separate meeting in May. “It’s also a matter of survival.”
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