China builds many things cheaply, but even expensively it has not been producing computer chips. Massive investment from the Chinese government means that this could soon change.
If/when China makes the most advanced AI chips, you can be sure of two things:
- The West won’t trust the chips, so they won’t be imported in any way
- The East won’t allow them to be exported, as they could give China a massive AI advantage
This will be one of the key aspects of the East/West Split, advances in technology combined with a lack of trust in what is built into that technology
Opinion from Will Knight at Technology Review:
China is the world’s largest and fastest-growing market for semiconductors, but no Chinese chipmaker has broken into the top 15 globally in terms of sales. Advanced chips are primarily made by companies from the US, Taiwan, Japan, South Korea, and Western Europe. China’s big economic rival, the US, accounts for about half of global sales and half of China’s chip imports.
…it released Made in China 2025, a sweeping blueprint for upgrading China’s entire manufacturing industry. This set the hugely ambitious goal of producing $305 billion worth of chips per year and meeting 80% of domestic demand for chips by 2030, up from $65 billion and 33%, respectively, in 2016.
…China won’t be playing catch-up with these new chips, as it has done with more conventional chips for decades. Instead, its existing strength in AI and its unparalleled access to the quantities of data required to train AI algorithms could give it an edge in designing chips optimized to run them.
China’s chip ambitions have geopolitical implications, too. Advanced chips are key to new weapons systems, better cryptography, and more powerful supercomputers. They are also central to the increasing trade tensions between the US and China. A successful chip industry would make China more economically competitive and independent. To many, in both Washington and Beijing, national strength and security are at stake.