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Since the onset of the tech war instigated by the United States in 2018, the focal point of this confrontation has predominantly been centered around semiconductorsThe United States has astutely identified this critical area, particularly due to the vulnerabilities present in its own position concerning chip manufacturingSemiconductors are intrinsic to the information technology sector, essentially functioning as the backbone of the digital economyWhen the supply of chips is constrained, it can considerably hinder not only technological advancement but also national security interests.

Initially, the U.Stargeted Huawei, a major player in telecommunications technology, but this action reverberated throughout the entire industryThis marked a pivotal shift in the strategy of various tech enterprises; many began to recognize the fragility of relying solely on external procurement

It also signaled the start of an urgent need for self-sufficiency in the semiconductor domainThe urgency for innovation and domestic production became apparent at that juncture.

Huawei took the lead in this endeavor, feeling a pronounced sense of existential threat from the sanctionsThe company initiated its backup plan for HiSilicon, its semiconductor arm, and by the time the MATE60 was launched in 2022, it had surmounted one significant hurdleFast forward to this year with the unveiling of MATE70, it appears that the company has significantly advanced through the challenges, akin to a boat that navigated treacherous waters to reach calmer shores.

Recent reports have confirmed that the MATE70 is equipped with 100 percent domestically produced chipsThe Kirin 9020 chip, representing cutting-edge technology, operates at an almost-equivalent 5nm manufacturing processThis achievement signals significant progress toward ensuring the nation’s strategic security in semiconductor manufacturing.

The MATE60, released last year, has reportedly sold over 14 million units within a year—a remarkable figure that underscores the demand and consumer acceptance bolstered by domestic chips in production

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The sheer volume of semiconductors embedded in these devices, ranging from dozens to hundreds per unit, has effectively addressed production scalability issuesTo put this into perspective, the potential to utilize over a billion chips in drones and military equipment during times of conflict indicates a solid foundation for national security.

This year has presented an apparent shift in circumstances; while advancements in the most sophisticated processes may seem limited, improvements in production quantities and yield rates are substantialThese trends are also reflected in trade statisticsAccording to the customs data released by China for the first eleven months of 2024, exports of integrated circuits reached approximately 1.03 trillion yuan, marking a 20.3% increaseThe import side shows a similarly upward trajectory, with imports of integrated circuits rising to 501.47 billion units, a respective increase of 14.8% valued at 2.48 trillion yuan—growing by 11.9%.

On the face of it, these figures might not resonate with many, but the critical backdrop is the persistent pressure exerted by the United States through sanctions and trade restrictions

The notable uptick in China’s semiconductor production, with output soaring from about 174 billion units in 2018 to over 353 billion units in the first ten months of 2024, reflects the resilience and adaptability of the industry despite external challenges.

The impact of U.Ssanctions has backfired, inadvertently catalyzing advancements within China’s semiconductor industry.

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The United States is undoubtedly aware of China's progress but feels somewhat ineffectual in countering these developmentsU.SSecretary of Commerce Gina Raimondo’s visit to China coincidentally overlapped with the MATE60's rolloutUpon her return, she expressed feelings of humiliation—a sentiment that underscores the striking disparity between the two nations’ achievements in technology.

Labeling this scenario as a humiliation might be an overstatement; it is more akin to a wake-up call

While the U.Shas not yet taken stringent retaliatory measures, it has tightened restrictions against the Chinese tech sector, even coordinating with the Netherlands to impose limits on lithography systems, a crucial component for chip manufacture, resorting to outrageous actions deemed as denying after-sales services.

However, the evidence of momentum within China’s semiconductor industry is undeniable, a tide that cannot be easily halted.

The progress in the semiconductor sector has fortified China's stance against incessant U.SsanctionsPreviously, there may have been a tendency to endure and bide time, but we are now witnessing a strategic exit from this state of beingIn light of escalating hostilities, China has commenced responses that indicate a readiness to retaliate decisivelyRecently, when the U.Sintensified its semiconductor controls, placing 140 firms on the “entity list,” a swift counter-move was made by China as it announced a ban on specific dual-use items intended for military applications destined for U.S

entitiesFurthermore, collaborative voices from industry associations urge caution in procuring American chips.

This moment signifies a clear declaration of intent that China is prepared to break through in the semiconductor arena.

According to industry data, over 75% of the global semiconductor market share is held in mature processes, specifically 28nm and above, while China has now achieved capabilities in 7-5nm technologyAdvancements that may further lower process nodes will hinge critically on breakthroughs in extreme ultraviolet (EUV) lithography technology.

Notably, the current gap primarily remains at the sub-5nm scale, with applications still predominantly centered around consumer electronics, particularly smartphones, alongside cutting-edge artificial intelligence computational chips which are largely operating within the 7-5nm spectrumThis indicates that while certain high-tech areas remain competitive, there is a substantial measure of sufficiency in existing chip processes.

The next phase will be dictated by how the supply chain is managed