The China government’s goal of sourcing 40% of its chips domestically by 2020 and 70% by 2025, is not going to be met, reports the Nikkei.

    TrendForce estimates that domestically designed ICs only accounted for 15% of the China market last year.

    China’s design industry has been growing at 20% a year since 2014, but is expected to grow at 17.9% this year to $42.9 billion, says TrendForce.

    IC Insights reckons that, including foreign-owned China-based facilities, China supplied 15% of its $155 billion chip market last year.

    An exec from IC design house NextVPU of Shanghai told the Nikkei: “Without updates from American software providers, China’s push to develop its own chips will hit a wall.”

    Another exec from an AI IC developer stated: “If we lose access to U.S. software or can no longer receive updates, our chip development will run into a dead end.”

    A SMIC manager emphasized the company’s reliance on imported IP, materials, equipment and EDA. 

    “We would use whatever chip equipment and materials we have locally if their performances were good enough,” he said, “but we still need equipment, materials, IPs and chip design software.”

    ‘Even if Huawei’s chips function as well as Qualcomm chips, we feel Qualcomm is a safer bet because of its decades-long experience in chip making, ” said exec from Shenzhen telecoms manufacturer Siecom  told the Nikkei.