China reserves US chips

Chinese companies stockpiled US semiconductor components as a precaution against the unpredictable impact of the trade war.

According to SCMP, the total value of Chinese imports from the United States fell sharply after tensions between the world's two largest economies broke out in 2018. However, the number of processor chips and related equipment Chinese companies bought from the US rose to a record high (worth about US $ 1.7 billion) in August and nearly reached that figure in October this year.

Some experts say the Trump administration's tariff barrier could spark a technological confrontation with China in the future. Conflicts between the two countries have worried Chinese technology companies about the risk of a shortage of chip supplies, in the context of domestic production capacity can not meet.

Dan Wang, an analyst with Gavekal Dragonomics, said: "The US restriction on China could be a fatal blow to the production activities of ZTE, Fujian Jinhua and even Huawei. So the government and companies in the country are trying to be independent of technology. "

Despite billions of dollars of government investment, the Chinese semiconductor components industry has not grown up to expectations, especially in key areas such as high-performance processors and graphics chips.

The website said that the decision to put Huawei and ZTE on the U.S. blacklist was one of the reasons for the soaring demand for chip imports. In addition, there are other reasons such as the appearance of household smartphone brands such as Huawei and Oppo, as well as Beijing's policy to accelerate the deployment of cloud computing applications.

Huawei is said to have anticipated the ban and has begun to gradually stockpile US components since 2018. In May 2019, Nikkei Asia Review wrote: "Huawei has stockpiled important components. The ability of the US to dominate the supply from 6 months to 1 year, while other components are stored 3 months earlier. "

The Shenzhen-based company has been repeatedly accused by US authorities of being a national security threat and a "hot spot" for the US-China War. Huawei's security equipment manufacturing company, Hikvision, has also stockpiled enough components to sustain manufacturing operations for a period of time.

In October this year, the Chinese government announced that it would invest an additional $ 29 billion in the semiconductor industry, in an attempt to break its dependence on American technology. Tsinghua Unigroup, a major Chinese chip manufacturer, has received many incentives to continue expanding its production scale. The company used government-funded money in 2014 to build a $ 22 billion factory on the outskirts of Wuhan City, Hubei Province.

The growth of China's semiconductor components industry has slowed significantly in 2019, when Fujan Jinhua, a potential Chinese chipmaker, was blacklisted by Washington. The total value of shipments of chip-making equipment from the United States to China also decreased from $ 26 billion in 2018. However, the country's companies still import nearly $ 2 billion / month from five equipment suppliers. America's leading equipment.

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