When US Commerce Secretary Wilbur Ross was asked on Monday about the state of US-China trade negotiations, he sounded fairly optimistic that a deal was possible.
He was also very confident that the US held a strong negotiating position, in part because “China now understands how dependent they are on us (for high-tech goods).”
That comment, made during an interview on CNBC in reference to a ban on US sales to Chinese chipmaker ZTE, may prove to be a bit overconfident.
ZTE’s fellow Chinese national champion telecom giant, Huawei, unveiled on Monday a new chipset that the company says puts it at the forefront of the industry.
The Kunpeng 920, an announcement said, is “the industry’s highest-performance Advanced RISC Machine (ARM)-based CPU. Called Kunpeng 920, the new CPU is designed to boost the development of computing in big data, distributed storage, and ARM-native application scenarios.”
The development builds on other strides that Huawei has made, including the Kirin 980 chip unveiled in August for use on the company’s smartphones.
Beijing has long viewed competitiveness in the semiconductor industry as an important priority, one which was included in its Made in China 2025 program. But many analysts saw the ban on sales to ZTE as a catalyst to speed up the drive for self-sufficiency.
“ZTE was a very big wake up call for China,” Ross said, noting that many analysts saw the ban as a death sentence for the Chinese telecom giant.
Ross may be right that the ZTE case raised alarm bells in Beijing, but the days of Chinese firms being dependent on US supplies are numbered.
The Kunpeng chip will be used in conjunction with Huawei’s TaiShan server to run cloud services.
“Today, with Kunpeng 920, we are entering an era of diversified computing embodied by multiple cores and heterogeneity,” Huawei CEO William Xu said in announcing the chip on Monday.