China raises baton of action against senior officials after failure in semic

Beijing/Washington: The Chinese dream of becoming the world leader in the semiconductor sector has been shattered. After nearly ten years of effort and an investment of roughly USD 100 billion, China has not achieved the expected success. Due to this, there is intense resentment in the ruling communist regime and President Xi Jinping, and action has been taken against the companies and senior officials in this sector to hide the failure. The website Bloomberg has reported that three major businessmen and officials in this sector are currently being investigated on corruption charges. At the same time, China has started spewing fire against the ‘Chips Act’ approved by the United States to maintain its dominance in the semiconductor sector.

At an event held last year, Alibaba, the leading Chinese company in the Internet sector, presented a chip named ‘Yitian 710’. The company said this chip would be used in the ‘Cloud Computing’ sector. Besides Alibaba, other leading technology companies were also forced by the Chinese communist regime to invest in the semiconductor sector. These include companies like Tencent, Baidu and Xiaomi.

But information is coming out that all these efforts of the Chinese ruling regime have failed. The Chinese ambition to become a global superpower and the trade war that started with Western and other countries over the last few years were the factors for the Chinese failure. China had announced an ambitious ‘Made in China Policy’ in the previous decade with the ambition to become a global superpower in the technology sector. China had taken a considerable lead by increasing investment in areas like information technology, robotics, artificial intelligence, and quantum computing. But in the semiconductor sector, this strategy seems to have failed. China imports nearly USD 100 billion worth of semiconductors from abroad every year. It includes Taiwan, South Korea and the European countries.

An investment of USD 100 billion was announced to make China self-reliant in this sector by reducing these imports. Separate funds were reported for each department, like research, manufacturing, and production. Thousands of companies came up in China to avail this fund. But these companies have failed to take a step forward in the technology field, and it has been revealed that these companies cannot meet the needs even at the local level. Moreover, funds of USD 9 billion had to be used to bail out one of the leading companies from bankruptcy. This is said to have upset Chinese President Xi Jinping and senior officials of the Communist Party.

Because of this displeasure, action has been initiated against the Minister and the entrepreneurs and officials who have been responsible for the semiconductor sector. Two senior officials have been investigated, along with Minister Xiao Yaqing and businessman Ding Wenwu, who manages a private fund. Ministers, entrepreneurs and officials have been accused of corruption. Indications have also been given that the scope of inquiry may increase in the coming times. An important reason behind the Chinese failure in the semiconductor sector is the aggressive stance taken by Western countries, including the United States, against Chinese hegemony.

The US Biden administration recently approved the CHIPS Act. The act will provide more than USD 50 billion in funding to companies in the semiconductor sector. In return, US companies and companies from Taiwan, Japan and South Korea will start manufacturing semiconductors in the United States. The law is a major blow to the Chinese semiconductor sector. Before this act, the United States had appealed to US companies in the semiconductor sector and European and Japanese companies not to supply advanced technology to China. At the same time, sanctions were also imposed on leading Chinese companies.

This is considered a part of the ‘Chips War’ waged by the United States against China. Analysts claim that this Western action and the failure of local companies have further upset the Chinese communist regime, and analysts claim that repercussions of this may be seen in the semiconductor sector and other technology sectors in the future.