Apr. 19 (NBD) -- The call for independently-developed chips is swelling in China with the United States' newly announced ban that prohibits Chinese tech company ZTE from buying components from American companies in seven years. 

Gu Wenjun, chief analyst at Shanghai-based industry researcher ICwise, Wednesday sat down with NBD for an exclusive interview, sharing his insights on how Chinese semiconductor enterprises could make groundbreaking innovation.  

NBD: Which chips does ZTE need for its base stations, optical communication, and mobile phone business? Are there any substitutes for these chips in China?

Gu: In general, ZTE uses hundreds of kinds of chips, most of which are imported. For high-end chips like memory chips, there is no substitute in China, while in the low-end segment, baseband, power supply, fingerprint, and touch control chips can all be replaced. 

NBD: What do you think is the most important lesson the United States' purchase ban against ZTE brings to China's semiconductor industry? 

Gu: Enterprises need to enhance internal control and management, attach great importance to R&D and core competence building, and give opportunities to domestic suppliers, so as to create a diverse supply network and avoid the heavy dependence on foreign chip suppliers. 

NBD: Why should businesses offer more support to domestic suppliers?

Gu: Support is essential to the growth of domestic suppliers. Businesses should have a big-picture mindset and pour more time, energy, and resources to grow together with domestic suppliers. Otherwise, they will fall into great trouble if foreign partners cut off the supply. 

Some companies have been aware of this and have been making efforts to support domestic suppliers consciously in recent years. What they really care when doing so is not the cost advantages, but the development of the entire industry chain. 

NBD: What else should the central government do in guiding the industry development?

Gu: More should be done to support leading industry players and market-oriented companies. What the government should do is to create platforms and favorable environment, rather than investing in or running enterprises itself. 

Specially speaking, as for the IC (integrated circuit) industry, talents and mechanism are both important. At present, state-owned enterprises have received enough support. In the future, efforts should be made to help market-oriented businesses play a bigger role. 

NBD: Where should China's semiconductor industry start with the independent innovation? 

Gu: To China, the best countermeasure now is to get down to R&D. China has made great headway in chip packaging, touch controller, and fingerprint recognition, but this is far from enough. The country should offer stronger support to the R&D of big enterprises, which also complies with the World Trade Organization's rules. In terms of the rewarding mechanism, work should be done to ensure rewards go to well-managed enterprises with strong R&D teams.  

 

Email: lansuying@nbd.com.cn

Editor: Lan Suying