AI Chip Development Overcrowding Will Lead to Losses, Predicts Chip Design Expert Wei Shaojun

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Published: November 13, 2023 at 4:59 am Updated: November 13, 2023 at 5:00 am

AI Chip Development Overcrowding Will Lead to Losses, Predicts Chip Design Expert Wei Shaojun

Wei Shaojun, president of integrated circuit (IC) design at the China Semiconductor Industry Association (CSIA), has cautioned Chinese firms about their efforts to attain increased self-sufficiency in the chips sector.

According to him, China’s chip design industry is facing significant losses this year, due to intense competition and a rapid influx of players into the sector. The challenges stem from Beijing’s focus on greater self-sufficiency, leading to substantial swathes of the IC industry facing financial difficulties this year due to the “blind pursuit” of success in an “extremely difficult” environment.

Although facing challenging conditions, China’s IC design sector achieved 8 percent growth amid challenging conditions, a significant majority of chip design firms were not in good shape.

The expert warned that Chinese firms should be more careful in their pursuit of success to prevent the domestic replacements of foreign products being considered as of low quality, while there are still numerous challenges remaining, particularly in achieving breakthroughs in high-end chips.

US Chip Export Restrictions Hampers China’s Compute Prowess

As per last month’s updated rules, the US Bureau of Industry and Security implemented stricter export restrictions on both semiconductor equipment and advanced AI chips. This adjustment will increase the difficulty for China in acquiring the necessary computing power for the development of supercomputers and artificial intelligence.

Wei Shaojun acknowledged that the restrictions imposed by the US will pose challenges for China in generating the necessary computing power for the development of supercomputers and artificial intelligence.

Despite facing rigorous sanctions from the United States, China has made significant strides in scientific and technological capabilities over the past year.

According to the 2022-2023 Global Computing Index report, created in collaboration between IDC, IEIT Systems, and the Tsinghua Institute for Global Industry, China’s data center infrastructure expanded by 29%, enhancing its computing power by 31%, and reinforcing its dedication to AI development.

Alisa is a reporter for the Metaverse Post. She focuses on investments, AI, metaverse, and everything related to Web3. Alisa has a degree in Business of Art and expertise in Art & Tech. She has developed her passion for journalism through writing for VCs, notable crypto projects, and engagement with scientific writing.

Alisa Davidson