00:00China is the world's top semiconductor consumer and now it's accelerating efforts to become
00:05self-sufficient. Last year, $47 billion in investment was raised as part of the so-called
00:12Big Fund, which aims to bolster the semiconductor industry and reduce reliance on other nations.
00:19While the value of China's chip industry was more than $180 million in 2024,
00:25and experts say that will reach close to $300 million by 2030. But one stumbling block for
00:32China has been this, extreme ultraviolet lithography, or EUVs. The machines help to
00:38reduce smaller, more powerful chips. Well, currently there's only one supplier for chip production
00:44equipment, ASML, from the Netherlands, but it's been barred from selling its most advanced models
00:50to China, under pressure from the United States. A breakthrough was made in China in March,
00:55domestic EUV system. It's been tested by Huawei and could come into production next year.
01:01Experts say it could be a game changer. Xiaomi's 3NM chip is also a significant milestone.
01:08It's just the fourth company globally to achieve this, and the first from China.
01:12And Huawei has also developed an advanced AI chip, the new Ascend processor.
01:17It's most powerful yet, and it's seen as a true competitor to the US giant NVIDIA.
01:23And talking of NVIDIA, well, its CEO says the US curbs on chip exports that were meant to hurt China
01:29have actually hurt the US more, and instead accelerated Beijing's efforts to pursue
01:34greater domestic innovation. Back to you, Juliette.
01:38Thanks, Shafoor.
01:40Well, Rob Enderlay is president and principal analyst of Enderlay Group.
01:43Thanks for coming on the program. Now, first of all, what do these tiny chips do that other chips can't?
01:51Well, basically, as you pointed out, they're really small. They're very power efficient and very powerful.
01:57This new Xiaomi chip is in line with the best from Qualcomm and recognized that they weren't even on the
02:04roadmap a couple of years back. So that's a massive move in terms of competitiveness over a very short
02:09period of time.
02:11And this launch from Xiaomi, I mean, how much of a big deal is it not just for the company, but for China
02:15and for the rest of the world?
02:17Well, it showcases that China is moving very quickly, far more quickly than the rest of the world is moving,
02:22largely as a result of being forced to do so because of the tariffs and blocks on US technology going to China
02:29and China technology coming out to the West. That has driven China to over execute, if you can use that as a term.
02:37And the end result is across a number and your coverage covered a lot of this across a number of areas from
02:43automotive to computers. China is not only coming up to parity, they're moving ahead very rapidly.
02:49So what you're saying is that we're seeing a potential shift in global chip manufacturing power dynamics.
02:55We are. The only thing that's limiting that shift are the barriers to moving technology between China
03:04and the West, largely sponsored by the US. But as the US's influence has waned, China's has increased
03:10and those blockades aren't going to last much longer.
03:14It's interesting, isn't it? You talk about those blockades, you know, NVIDIA's boss saying that those
03:18US curbs on chip exports that were meant to hurt China are actually going to hurt the US more.
03:23What's your take? I agree. What this has done is driven the Chinese government to fix their lack
03:31of competitiveness in these technologies. Rather than buying from the US, they're building their own
03:36with massive financial backing. And they've closed gaps that people thought were unclosable in a matter
03:42of months. So it's frightening how quick they're going. And it's also frightening how little concern
03:48the West seems to have at the moment. Okay, so the US and China seem to be owning this space.
03:54But what about Europe and other burgeoning tech hubs like maybe India? Have they all left it too late
04:00to get in the game? Possibly. The sheer momentum that China is showing makes it very difficult without
04:08similar levels of government funding for anybody else to catch up. And Western governments just haven't
04:14been all that interested in funding development efforts like this. So right now, it's China's
04:19government is actually driving a level of development and advancement that the other countries appear
04:23to be unwilling to match. And that's problematic.
04:26Rob Enderlay, it's been great getting your insights. That's Rob Enderlay, president and principal
04:30analyst at Enderlay Group.
Comments