The Hidden Battle in the Intelligent Era, How Can Chinese Chips Overtake on the Curve?

On April 16, Beijing time, the U.S. Department of Commerce officially confirmed the export ban on ZTE Corporation. This ban struck like a heavy hammer, awakening many in China's technology sector who had grown accustomed to swimming in comfortable waters.

Importing chips from abroad is nothing new for Chinese technology companies. Chips have already surpassed oil and natural gas to become China's largest import demand annually. It is worth noting that the U.S. chip embargo against ZTE is not only an extension of the trade war but also conceals the hidden tensions of great-power rivalry. Chips are not only the core components of the consumer electronics industry but also affect various aspects of national well-being, such as artificial intelligence, national security, and smart city construction.

The "ZTE incident" exposed the soft underbelly of China's technology sector. In an era where information technology is omnipresent, the call for China's own "core" is growing increasingly urgent.

Consumer Electronics Sector: Achievements Made, But More Efforts Needed

At the end of 2015, just before the release of the U.S. Qualcomm's Snapdragon 820 processor, Chinese smartphone manufacturers, led by LeEco, fiercely competed for the "first launch" of the Snapdragon 820. In contrast, Samsung, with its independent R&D and production capabilities for processors, calmly released its flagship phone without haste. Additionally, chip-exporting manufacturers like Qualcomm and Samsung often artificially "limit supply" to create shortages for phone manufacturers or impose "patent fees" to indirectly raise product prices—costs ultimately borne by consumers.

It is encouraging that Xiaomi and Huawei, both in the top tier of domestic smartphone manufacturers, have taken the lead in developing and producing "Chinese chips." HiSilicon, a wholly-owned subsidiary of Huawei, has become the "mainstay" of domestic mobile chip R&D. The latest Kirin 970 processor, used in Huawei's P20 and Honor 10 models, performs on par with flagship processors from Western brands. On February 28, 2017, Xiaomi unveiled its Surge S1 processor, a mid-range chip used in some Xiaomi models, marking Xiaomi's first step in independent chip R&D. It is reported that the more powerful Surge S2 is in active development.

Beyond smartphones, we have also achieved remarkable success in other 3C fields. For example, Vimicro's independently developed multimedia chips are widely used in cameras for PCs and smartphones, procured by leading IT companies such as Sony, Samsung, HP, and Philips, once capturing 70% of the global market share. In July 2006, Vimicro launched the world's first "driver-free" PC camera chip, quickly sweeping the global market and becoming a true "star chip."

While we have made progress in traditional manufacturing, it is far from enough. The aforementioned Kirin and Surge chips, though independently developed, still use architectures licensed by the British company ARM. At the pinnacle of the integrated circuit industry, we need more exploration.

The Silent War in the Intelligent Era: An Opportunity for Overtaking

A tiny chip affects not only the performance of consumer devices like smartphones and computers but also a nation's industrial standing and the direction and pace of urban governance.

Today, the U.S. wireless industry supports over 4.7 million jobs and contributes $475 billion annually to the economy. In the upcoming 5G era, China holds a slight lead. The move against ZTE may only be the beginning of a large-scale U.S. effort to reclaim lost ground.

The "National Integrated Circuit Industry Development Promotion Outline," issued by the Ministry of Industry and Information Technology in 2014, emphasizes the need to develop high-quality chips for mobile and communication devices while advancing R&D in chips for cloud computing, big data, and the Internet of Things—the foundational infrastructure for today's AI industry and future smart cities.

Among these, chips responsible for IoT and AI computing will handle the most critical computational functions. Currently, a number of Chinese companies have emerged with the capability to produce general-purpose AI chips and chips for smart city applications, with Vimicro being one of them.

In March 2016, Vimicro released China's first embedded NPU, the "Xingguang Intelligent One." This NPU adopts a "data-driven parallel computing" architecture, excelling at processing vast amounts of multimedia data such as video and images. It enables AI to shine in embedded machine vision applications and better serve the construction of smart cities.

Under the watchful eye of the United States, China's general-purpose computing chip industry started in adversity and grew under blockade. At the critical juncture of AI's rise and the competition for smart city development, China has an opportunity to overtake on the curve.

Deng Zhonghan, founder of Vimicro Group and an academician of the Chinese Academy of Engineering, stated in March of this year: "Currently, China is a hotspot for AI chip investment and entrepreneurship. We should maintain this momentum, continuously overtaking on curves or even changing lanes in 'unexplored territories' to achieve AI chip development."

Deng Zhonghan and the Vimicro team he leads have already seized this opportunity and are running fast on this path.

Wrestling for National Security Prevention: From Setting Standards to Leading Discourse

Today, China's independent chips in the consumer sector have reached a practical stage. However, in applications requiring high stability and reliability, such as communications, industry, healthcare, and military large-scale deployments, independent chips still lag significantly behind international standards. These areas are precisely the most critical and deserving of protection for any nation. Long-term reliance on foreign chips makes a country's protection of key sectors vulnerable.

"For a long time to come, external dependence will remain high," said Wei Shaojun, Director of the Department of Micro/Nano Electronics at Tsinghua University, candidly.

Video surveillance is one such industry urgently needing to reduce external dependence. In China, 92% of public security cases are solved using video surveillance systems deployed across cities nationwide. This video monitoring is also widely applied in border defense, production safety, and other areas. By building smart cities, a vast security network is created. If such data were to leak, the consequences would be unimaginable.

Given the stakes for core interests and national security, Deng Zhonghan led the "Xingguang China Chip Project" team to spearhead the development of the "Security and Protection Surveillance Digital Video and Audio Coding Technology Requirements" (hereinafter referred to as the SVAC National Standard), which boasts China's independent intellectual property rights and internationally leading technical standards. They invested heavily in independent R&D, achieving breakthroughs in core technologies such as the SVAC algorithm, artificial intelligence, video big data, visual IoT, and spatiotemporal big data.

The aforementioned "Xingguang Intelligent One" is a significant achievement of Vimicro in this field. Currently, this chip is not only used in Vimicro's traditional security surveillance sector but also widely applied in ecological protection, smart homes, unmanned systems, aerospace and military, and high-speed rail maintenance systems. Self-developed and self-produced cutting-edge chips fundamentally safeguard national information security.

On December 14, 2017, the second generation of the SVAC standard was promulgated and released as a mandatory standard system. In the future, more chips and algorithms will be developed based on this standard, allowing China to truly possess its own industrial discourse system.

On March 30, 2013, Deng Zhonghan stated at a summit that only by establishing standards and guiding the development direction of the entire industry can a nation truly enhance its voice in the global industrial chain and genuinely protect national security.