Chip manufacturing requires heavy capital investment and policy support, and it takes a very long-term technical accumulation phase. After decades of continuous advancement, China has nearly 2,000 chip design related companies, ranking first in the world. But when it comes to total revenue, it currently accounts for about 13% of global chip revenue.

According to customs data, the number of imported chips in China was 417.57 billion pieces in 2018, up 10.8% year-on-year. The import value reached 312.158 billion US dollars, up 19.8% year-on-year. This is the first time that China's chip imports exceeded US$300 billion. According to customs statistics, China’s chip imports in the past decade have exceeded crude oil imports every year.

Market research firm Gartner released a 2018 global top 10 chip buyers in early 2019. China has four seats, namely Huawei, Lenovo, BBK and Xiaomi. The four Chinese companies spent nearly $60 billion a year to purchase chips in 2018, with Huawei accounting for a maximum of $21.1 billion, a 45% increase from 2017.

In fact, Huawei has already begun to develop its own chip technology. The reporter was informed that as of last year, Huawei has low-profile development of chips for 14 years, with an accumulated investment of more than 100 billion yuan. Huawei has the seventh largest internal chip design department in the world. The company is also developing high-end chips for artificial intelligence, gradually reducing its dependence on foreign chips.

This strategy has already begun to bear fruit. In August last year, Huawei's high-tech chip Kirin 980 appeared, shocking the Western world, making China's chip technology to the forefront of the world. At the recent IFA Berlin International Electronics Show in Germany, Huawei released the latest Kirin 990 chip, which will be used in its upcoming new Mate 30 smartphone.

Ni Guangnan, an academician of the Chinese Academy of Engineering, told the First Financial Reporter: "The core of technological development such as artificial intelligence includes the core technology of chip hardware and the software core technology of the operating system. If it is not Huawei's event, China may not pay attention to it. Now the country is The investment in the chip is big, but it is still in its infancy."

In order to get rid of its dependence on US chip products, China is spending hundreds of billions of dollars to cultivate local chip leaders and seek the ability to acquire independent chip design and manufacturing.

As early as 2014, McKinsey's report showed that the Chinese government's investment in the chip industry is expected to reach $170 billion over the past five years to five years.China's semiconductor development road is accelerating.

The latest IC industry five-year promotion plan document released on May 8th shows that by 2023, the overall sales revenue of the target industry will exceed 200 billion yuan, the sales revenue of the chip design industry will exceed 160 billion yuan, and the sales revenue of the manufacturing and related links will reach 400. 100 million yuan, the introduction and cultivation of 10 key enterprises with sales income of more than 2 billion yuan, becoming a new engine for the development of strategic emerging industries.

Governments across China are also increasing their financial support to support supporting measures in industries including artificial intelligence, domestic software and integrated circuits. Enterprises that meet the requirements can enjoy tax benefits.

The Ministry of Commerce has also announced a two- to five-year tax cut for domestic chip companies, covering high- and low-end chips, from computers to mobile phones and other electronic devices. Among them, high-end chips produced by process technology above 65 nanometers, enterprises with investment of more than 15 billion yuan will receive five years of tax reduction; chip companies that produce technology above 130 nanometers will receive two years of tax relief. This policy is beneficial to China's traditional chip manufacturing industry and promotes its industrial upgrading and production scale.