BEIJING: China&#39;s push to develop top-end artificial intelligence microchips is gaining momentum, but analysts say it will struggle to match the technical might of US powerhouse Nvidia within the current decade.&nbsp;Ramping up its chip industry is a way for Beijing to beat restrictions imposed by Washington on exports of the most advanced chips &mdash; used to power AI systems &mdash; to China.&nbsp;The United States cites national security concerns, such as the risk of giving China a military advantage, as the reason for the block, a geopolitical bind that shows no sign of easing.&nbsp;&quot;China wants chips that policy cannot take away,&quot; said Stephen Wu, a former AI software engineer and founder of the Carthage Capital investment fund.&nbsp;However, &quot;full end-to-end parity with Nvidia&#39;s best chips, memory packaging, networking and software is not guaranteed&quot; by 2030 or even beyond, Wu told AFP.&nbsp;Announcements by Chinese companies of computing upgrades and reports of plans to dramatically increase the output of advanced semiconductors have driven up chip-related shares in the country.&nbsp;But to catch up with Nvidia, China needs to make fast progress on high-bandwidth memory and packaging &mdash; &quot;the hardest and most complex parts of the chip,&quot; Wu said.&nbsp;Other challenges include building the right software to harness the chips&#39; power and upgrading manufacturing tools.&nbsp;&quot;These chips are extremely advanced and tiny, so imagine carving a stone sculpture with a hammer instead of a chisel,&quot; Wu said.&nbsp;&#39;Only way&#39; to succeed&nbsp;&quot;The industry consensus is China at least needs five to ten years to catch up,&quot; said George Chen of The Asia Group, a view reflected by Dilin Wu, research strategist at Pepperstone.&nbsp;&quot;The future is bright, but not yet,&quot; she told AFP.&nbsp;&quot;It&#39;s maybe a 2030 story&quot; as &quot;significant gaps remain in terms of performance, and also in terms of energy efficiency and ecosystem maturity.&quot;&nbsp;Public demand for AI services is booming in China, and while government support for new chips is &quot;substantial,&quot; the investment required is &quot;immense,&quot; she added.&nbsp;Shares in Alibaba, the e-commerce titan ploughing billions of dollars into AI tech, have more than doubled since January.&nbsp;And Chinese chip industry leader Huawei will reportedly double the output of its top Ascend 910C chip in the next year.&nbsp;The hype has also sharply driven up stocks in the smaller chipmaker Cambricon, sometimes dubbed &quot;China&#39;s Nvidia.&quot;&nbsp;&quot;I think this rally can be sustained,&quot; partly because it is driven by Chinese government policy, Pepperstone&#39;s Wu said.&nbsp;Even Xiaomi, whose 2014 venture into chip design was a confessed flop, is turning back to semiconductors.&nbsp;&quot;Chips are the only way for Xiaomi to succeed,&quot; the company&#39;s CEO Lei Jun said in Beijing last month, referring to the production of high-end smartphone chips.&nbsp;&#39;Best in China&#39;China, the world&#39;s biggest consumer of semiconductors, is a huge market for California-based Nvidia.&nbsp;Nvidia chips are still &quot;the best ... to train large language models,&quot; the systems behind generative AI, said Chen Cheng, general manager for AI translation software at tech firm iFLYTEK.&nbsp;Faced with US restrictions, &quot;we overcame that difficulty&quot; by shifting to Chinese-made tech, she said in a group interview.&nbsp;&quot;Now our model is trained on Huawei chips&quot; -- currently the best in China, Cheng said.&nbsp;Meanwhile, Nvidia, the world&#39;s largest company by market capitalization, is under pressure from both sides.&nbsp;The Financial Times reported last month that Beijing had barred major Chinese firms from purchasing a state-of-the-art Nvidia processor, which was explicitly designed for the country.&nbsp;The company must now pay the US government 15 percent of its revenue from certain AI chip sales in China.&nbsp;Nvidia boss Jensen Huang has warned that restrictions on exporting his most cutting-edge semiconductors to China will only fuel the country&#39;s rise.&nbsp;&quot;They&#39;re nanoseconds behind us,&quot; the leather jacket-clad Huang said on a tech business podcast.&nbsp;&quot;So, we&#39;ve got to go compete.&quot;

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The United States cites national security concerns, such as the risk of giving China a military advantage, as the reason for the block, a geopolitical bind that shows no sign of easing.

Articles tagged with "Chip challenge"

China's chip challenge: The race to match US tech

China's chip challenge: The race to match US tech