Illustration: Chen Xia/GT

While the US move to block Chinese companies from accessing high-performance artificial intelligence (AI) chips produced by American companies or using American technology is causing trouble for China's technology sector, the pursuit of alternatives is opening up new opportunities for domestic chips and related applications.

It seems what US industry players have been warning the Biden administration about is actually in play. The rise of domestic chips won't come easily as it requires time, money and market space, but US pressure has greatly accelerated the process.

The US has been tightening restrictions on exports of chips and chip tools to China, including those of Nvidia. But the only result of those US curbs, which are aimed at safeguarding US technology hegemony and violating the principle of fair competition, is to cut American chip giants out of the Chinese market while facilitating Chinese tech companies' shift to local supplies.

For instance, Nvidia CFO Colette Kress said in June that, "Over the long term, restrictions prohibiting the sale of our data center products to China, if implemented, will result in a permanent loss of opportunities for the US industry to compete and lead in one of the world's largest markets." At that time, there were media reports that the Biden administration was considering new restrictions on exporting AI chips to China.

It is technological suppression by the US that has made China and its technology sector determined to take the path of independent innovation to break these shackles. Over the years, the Chinese government has poured resources into the semiconductor industry, while Chinese companies have increased investment in research and development to accelerate technological breakthroughs.

These days, signs that those efforts have paid off have emerged one by one. Huawei in August introduced a smartphone that uses internally developed processors featuring advanced semiconductor technology, highlighting its hard-earned progress under sanctions.

In fact, Chinese AI companies have never ceased efforts to achieve technological breakthrough to reduce their supply chain vulnerability under the US curbs, so as to ensure the long-term development of their AI technology and applications amid global competition.

The development of the domestic chip industry also provides more opportunities for Chinese technology companies, which have been relying on imported chips to develop new products. 

With the pursuit of domestic alternatives, their dependence on external supplies will be reduced, which will be conducive to their supply chain stability while lowering product costs and making them more competitive in the global market.

The development of the Chinese chip industry still faces challenges in terms of technology, production capacity and supply chains. But that won't shake the confidence and determination of the industry. 

As long as the US chip curbs exist, the rise of domestic chips is not just a breakthrough, it's also the start of the practical application of China's domestic AI chips in terms of technology levels and market acceptance.