Daniel Slotta
Research expert covering Greater China
Computer hardware in China - statistics & facts
Ever since the COVID-19 pandemic ripped through global supply chains, many countries have woken up to the reality of how interwoven the computer hardware industry is and how essential computer parts are. Even though, traditionally, China is not renowned for cutting-edge equipment like Taiwan or the U.S., it is catching up. However, China’s rise is not without pushback from its economic rivals.
A rude awakening to global interdependencies
The reckoning of dependence came a few years earlier than in the rest of the world. Although the Chinese government had plans to become independent of imports of key technologies, the urgency of the issue became clear when the U.S. government restricted American companies from selling products to Chinese telecommunications companies, ZTE in 2017, and Huawei in 2020. Both companies suffered financially from the ban; Huawei has significantly downsized its smartphone operation in the immediate aftermath. Therefore, the Chinese government understood that access to high-tech computer hardware is not only crucial for business but also for the country’s security and competitiveness.Building the infrastructure and gathering the knowhow
Since the cornerstone of computer hardware is semiconductors, the industry faces similar challenges. Cutting-edge computer parts such as CPUs and GPUs require many precursory parts, advanced know-how, and top-of-the-range manufacturing infrastructure. Since it is a global industry, many factors are outside of China’s domain. Therefore, the Chinese government allocated several resources in the form of R&D and capital investments into the domestic industry. Chinese companies, such as Semiconductor Manufacturing International Corporation and Huawei, are catching up.Demand for more power and more hardware
The United States and China are in a high-technology race that relies on computing power, which drives up demand for computer hardware. Whether it is artificial intelligence, cloud computing, or developing next-gen supercomputers, the two economic powers compete for a leading edge. Since it is not only a question of economic success, the dual-use capabilities of these technologies also make them strategically important. One thing that these technologies have in common is their need for massive amounts of computing power, which will drive up global demand for computer hardware in the foreseeable future.Will China move up to the chip Champions League ?
Being able to produce top-notch computer hardware is not only crucial for the economic success of the domestic industry but also for national strategic development. Against the backdrop of international tensions and the following mutual trade restrictions, China needs to build a domestic computer hardware industry that can build and develop cutting-edge technologies. With government support, Chinese computer hardware has made big strides in narrowing the gap with the industry leaders, but there is still some distance to close.
