China Chips Away at US Dominance in Semiconductors

According to recent reports, China's leading chipmaker SMIC has achieved a breakthrough by producing 7nm chips, defying US export controls aimed at limiting China's progress. 

A case in point is Moore Threads' announcement of their S4000 AI GPU and Intelligent Computing Center using 1,000 of these GPUs demonstrates the ambition and technical capabilities of these Chinese startups. While not nearly as performant as NVIDIA's flagship A100 GP, the S4000 exceeds the specs of NVIDIA’s earlier GPUs. 

This latest advance is just one indication of China's determination to achieve self-reliance in integrated circuits. While the US still holds the edge in the most advanced 5nm production and chip design, analysts warn that China may be able to progress to 5nm and beyond despite lacking access to cutting-edge lithography machines from the Netherlands and Japan.

China has found ways to obtain semiconductor manufacturing equipment from abroad despite US trade restrictions. It also has extensive talent programs to develop domestic expertise. So, export controls alone may not contain China's ambitions.

To complement its technology restrictions on China, the US itself needs to invest more in domestic chip production and innovation. Generous subsidies under the CHIPS Act passed in 2022 are a start, but incentives for advanced chip R&D and new foundries also matter. 

Maintaining US strengths in computer chip design via firms like NVIDIA and Qualcomm is equally crucial. Such firms can then focus on the highest-value work of creating powerful AI and high-performance chips, while reducing the need to rely on foreign foundry partners for manufacturing. 

More broadly, allowing some commercial chip sales to China could benefit US firms financially while still restricting technologies deemed risky for national security. Such nuance contrasts with the blunt tool of blanket export bans.

Achieving self-reliance in ICs is a top priority for China, as it wants to reduce reliance on foreign tech across electronics. US policymakers need to prepare for a future where China makes continued progress in semiconductors - it likely won't be contained for long.

Sources:

[1] https://www.tomshardware.com/pc-components/gpus/nvidias-biggest-chinese-competitor-unveils-cutting-edge-new-ai-gpus-moore-threads-s4000-ai-gpu-and-intelligent-computing-center-server-clusters-using-1000-of-the-new-ai-gpus