Chinese Firms Resist Adopting Domestic Semiconductor Solutions

Chinese companies are hesitant to adopt domestically produced chips despite extensive government-backed localization efforts, according to a DigiTimes report cited by Anton Shilov for Tom’s Hardware.

While US sanctions have restricted China’s access to advanced chips like Nvidia’s H100, domestic alternatives fail to meet the same performance standards. I Photo: NVIDIA

This reluctance spans a wide array of chip categories, including processors for AI and high-performance computing (HPC).

Reasons for resistance include inferior performance compared to international alternatives, limited production volumes, and inadequate software support for local designs.

While US sanctions have restricted China’s access to advanced chips like Nvidia’s H100, domestic alternatives fail to meet the same performance standards.

Many firms fear losing competitiveness and resort to alternative methods, such as smuggling or leasing overseas data centers, to access superior hardware.

Additionally, Chinese semiconductor manufacturers like SMIC face significant challenges in scaling up production of AI chips due to limited access to advanced fabrication tools, raising concerns about the country’s ability to meet domestic demands in critical sectors.rds