A coalition of top Chinese technology companies is coming together to form a consortium that will promote China’s domestic chipmaking efforts. According to the Chinese Ministry of Information and Technology, there are over 90 such top Chinese firms including darling phone market Huawei who are now effectively barred from using Western Technology. The nationalist goal of the consortium is to establish a viable local chip industry that will rival the one in the West.
In addition to Huawei, there are other notable names on the list including Xiaomi and ZTE. The former was recently labelled “a Chinese Military company” by Donald Trump before he left office. ZTE was the first company to face Donald Trump’s wrath before he turned to Huawei.
Huawei’s fall from Grace in Numbers
|Year||Quarter||Domestic Shipments in millions||International Shipments in Millions|
Once destined to be the kings of the smartphone market Huawei is smarting and some even speculate that its very survival as a global company is under threat. The company shipped about 33 million phones in the last quarter compared to 56 million in 2019. That is a shocking plunge that means the company is now about number 3 after poor Apple. The future is even bleaker.
The thing though is that thanks to the chip ban which bars Huawei from accessing American made chips, even the company’s home market in China is under threat. Their domestic shipments have been going down too as their chip stockpiles dwindle. In fact, if they have chips to use in their devices they are okay. They may never be top phone makers by shipment but they will always have a market in the rest of the world. America’s reach and influence is still vast but it sure ain’t what it used to be.
With chips China will rise again
China’s gadget dominance is under threat as long as they rely on critical Western technology like Western designed chips. Permission to use and access to these, recent history has shown, can be yanked for the flimsiest of reasons under the guise of national security.
China has made it’s mark as a manufacturing powerhouse. They can mass produce devices of acceptable quality much more cheapily than Western countries. However new entrants like Vietnam are also now vying for some of that business. If China is to overtake and stay ahead of the US as the largest economy they need to seriously consider research and development of their own in order to improve their indepenence.
With domestically made chips China will rise again. While US officials have pushed hard for countries to sideline Huawei on this continent and in Zimbabwe in particular the Huawei brand is highly regarded. All the company and it’s fellow Chinese firms have to do is keep producing.