US-China Relations Updates

Since China took the lead in 5G, Huawei has become the “thorn” in the eyes of the United States. In order to comprehensively suppress Huawei and prevent the development of Chinese technology, the Biden team has used all means possible, it can be said that they have gone to extremes. For example, smearing Huawei equipment as “unsafe”, forming alliances to “isolate” Huawei, using technological advantages to cut off chips, operating systems, and EDA software, etc. The only goal is to not leave any room for Huawei.

Because Huawei was “strangled” by chips, China’s technology industry began to focus on semiconductors, and many technology companies have entered the field of self-developed chips, hoping to compete with “China chips”. It cannot be denied that in the past three years, “China chips” have made great breakthroughs and have grown at an astonishing rate. In an environment where Western countries have set up numerous technological barriers, “China chips” have still been able to advance against the odds, which is quite rare.

Chip R&D is difficult, with complex processes. “China chips” not only lack the advantage of favorable timing and location, but also only have the advantage of human resources. Obviously, in the competition between China and the US over chips, “China chips” have fallen behind.

Recently, a heavyweight news came out, revealing the true situation of “China chips”. OPPO’s self-developed chip subsidiary, Zhiku, has officially announced its dissolution, which means that another domestic technology giant has fallen in the chip race. According to officials, over the past few years, OPPO has invested billions and recruited 3,300 employees. Overnight, it all came to nothing.

As for why Zhiku suddenly disbanded, the answer is still unknown. There are mainly two external claims. One is that Zhiku is out of money. Personally, I do not think this claim is credible. From the subsidies that Zhiku gave to its employees, Zhiku is not short of money. The second is that Zhiku was warned, and this claim is more credible. Objectively speaking, domestic chip companies’ technology is restricted and they have to rely on licensing in many aspects. Once domestically-developed chips threaten American companies, the US will take action to “strangle” them.

Unlike Huawei, whose mobile phone business is only one of its main businesses, in the process of self-developing chips, it can be “supported” by the communication business. Faced with American “suppression”, Huawei has the confidence to withstand it. But OPPO’s business is single, and once it is suppressed by the US, the entire mobile phone business may collapse. Therefore, facing the US’s “warning”, OPPO can only “cut off its arm” to save itself.

Although it is cruel, this is the current situation of “China chips”. In addition to facing more complex and difficult technical problems, they also need to guard against being “strangled” by the US at the slightest achievement in the development process. Without a doubt, the road of self-developing chips is difficult and bumpy, and this is something that China enterprices need to pay attention to. The current situation of “China chips” is not so optimistic. “Self-hyping” is of no use.

In fact, after Zhiku announced its failure, foreign media began to mock “China chips”, and even some US media said that the fate of “China chips” has been determined and that American chips cannot be surpassed. This is not an exaggeration. Except for the US, almost the entire world does not have high expectations for China to achieve a “come-from-behind victory” in chips, and many countries and regions are happy to see Chinese enterprises being “strangled” by chips.

After all, as long as China can obtain technology, the price will be “beaten” down, which is something that other countries and regions do not want to see. However, Chinese enterprises have always insisted on “knowing that there are tigers in the mountains, yet still going to the mountain”. They cannot be scared by difficulties. I hope that in the failure of Zhiku, Chinese enterprises can learn from it, be low-key and resilient, not be discouraged, not give up, not compromise, and continue to work hard!