China’s powered-up chips

Two Chinese firms are readying production of new 5-nanometer semiconductors, according to The Financial Times, putting China one step closer to technological parity with the US. SMIC will mass-produce the high-powered chips, designed by Huawei, in Shanghai, which can be used to power next-generation smartphones.

The report says that if the smartphone chip line runs smoothly, SMIC will turn next to making Huawei’s Ascend 920 graphics chips, which the Chinese chip designer hopes will rival high-end NVIDIA’s H100 chips.

The Biden administration has taken extensive steps to curb the influx of chips and chip-manufacturing technology into China. The US is especially concerned about China using AI to boost its military capabilities, which require the highest-powered chips, such as those built by AMD and NVIDIA.

That said, Xiaomeng Lu, Eurasia Group’s director for geo-technology, compared the 5nm chips to Huawei’s demonstration of a 5G phone last year.

“It shows signs of China making progress – and they will catch up in the long term – but in the grand scheme of things this is an incremental, not a groundbreaking step,” she said.