It is with a heavy heart that I bid farewell as editorial director today. After over three and a half years, I will leave Table.Media at the end of the month. I am very grateful to have been given the opportunity to help build a unique China medium. Nowhere else do China observation and journalism come together in such depth. In a time of ever-increasing polarization, it was liberating to have the breathing space for differentiation and a wide range of views in one medium.
We started amid the pandemic under difficult conditions for editorial collaboration and research. Since then, China.Table has undergone various changes and adaptations to become the information product you see before you today. After all, the perception of the China dilemma has shifted several times during this time.
To this day, China.Table sees a crucial part of its work in understanding the changes that Xi Jinping has brought to China’s relationship with the world. It is about applying his systemic understanding to the economies and policies of the West and Germany. However, due to the experiences during the pandemic, supply chain security was also a prominent topic from the very beginning. The Russian invasion of Ukraine then brought geopolitical risks to the fore.
Technological and economic competition with China has recently taken up most of the space. The People’s Republic has caught up with the West in terms of technology. VW’s current woes are a symptom of falling behind a strong competitor.
This is also the topic of today’s issue: China’s progress in the production of high-performance microprocessors despite US sanctions. On the one hand, we look at the methods the state has used to create its own semiconductor industry through industrial policy. And on the other, a top product that has emerged from this: Huawei’s new smartphone, which outshines even the flagship models from Samsung and Apple.
In fact, these developments are trends that the members of the Table editorial team have repeatedly pointed out early on – even when they were still working for other publications. At Table.Briefings, this expertise finds a focal point. I would therefore like to thank my wonderful colleagues from the Table editorial team for the time we have shared. The whole is more than the sum of its parts: We pass the ball to each other across editorial boundaries and thus create a unique added value. Journalism thrives on competent minds, especially the Deep Journalism that Table.Media stands for.
I am looking forward to remaining a part of the China.Table project as a reader.
Huawei stole the show from Apple with the launch of a new super smartphone, which coincided with the launch of the iPhone 16 in China. The Chinese technology giant unveiled the Mate XT at an event on Tuesday. What makes it so special is that it is the world’s first double-folding smartphone.
When folded up, it looks like a regular smartphone. But unfolded, it is almost as big as a tablet with its three-part display. Huawei’s marketing team already teased the new product on social media in the past few days – and cleverly set the product launch date just a few hours after the Apple event in Cupertino, where the new iPhone 16 and other product updates were unveiled.
As anticipated, Apple only presented minor improvements to its devices. However, in China, where the US company has been struggling with declining sales, this is unlikely to be enough to bring about a turnaround. In the battle between Apple and Huawei, there has been a trend shift towards Chinese brands, just as with VW versus BYD.
Chinese Apple fans were particularly disappointed that the iPhone’s new AI functions, Apple Intelligence, will not be available in China for the time being. The same applies to Europe. Initially, the service will only be available in the USA. And even there, it won’t be available right away.
In the West, ChatGPT services are used for the AI functions. However, ChatGPT is not available in China. Apple has not yet revealed how it intends to bring AI to mobile phones in China. On the other hand, Chinese smartphone providers have either already introduced their own AI solutions for their new generation of devices (including Huawei) or have teamed up with tech companies such as Baidu.
Loyal iPhone buyers in China are still in the dark about what Apple will offer them. “Why should you buy it if you can’t use AI?” one user wrote on Weibo. Another commented: “Without AI as the biggest selling point, it should be half the price.”
On the other hand, Huawei showed how not to bore its customers. On Tuesday, the company’s website revealed that it had already received over 3.6 million pre-orders for the new Mate XT. That would be a tremendous success. Although foldable phones are more common in China than in Europe or the USA, the market here is still relatively small overall due to the prices. Huawei is asking a steep 19,999 RMB (around 2,500 euros) as the entry-level price.
The launch of the new model, which follows a series of successful smartphone presentations since last year, underlines Huawei’s ability to survive and even thrive despite US sanctions. The Shenzhen-based company has gone through difficult years with a heavy slump in sales in the smartphone business after the US was no longer allowed to supply Huawei with key Western technology.
The turning point in the smartphone market came almost exactly a year ago. At that time, Huawei presented its current flagship smartphone, the Mate 60 Pro – coinciding with the visit of US Secretary of Commerce Gina Raimondo to China. This timing was highly symbolic, as the Mate 60 Pro contains advanced Chinese semiconductor technology.
Although the Chinese-made chips used in the phone cannot yet keep up with those of the iPhone, the overall package is impressive. It was particularly important that Huawei’s Mate 60 Pro could once again offer 5G connectivity for fast internet in its devices. This was not possible for some time because of the lack of components due to the US sanctions.
Business is now booming again for Huawei: The company from Shenzhen in southern China sold 18 million smartphones in the last quarter alone. While Huawei is on the upswing, Apple is now struggling with weak sales figures in China. In the Chinese smartphone sales ranking, Apple fell from rank three to rank six in the second quarter, while Huawei rose to rank three thanks to strong sales of its latest smartphones.
The Chinese government is bundling and accelerating the development of its own capabilities for building high-performance microprocessors. Sanctions against China’s semiconductor industry, such as those imposed by the USA, Japan and the Netherlands, may lose their effect sooner than expected.
Since May, investments have been flowing from the third phase of the National Integrated Circuit Industry Investment Fund, also known as the Big Fund 3.0. On the one hand, these funds go to established manufacturers who have been perfecting older technology and offering it in large numbers. On the other hand, the industry’s most innovative players also receive money from the fund. Their mission: To catch up with Western companies and initiate a process of “de-Americanization.” Xi Jinping wants to make China independent of US technology.
The chip sanctions have hit China hard. No modern technology can manage without fast processors. China’s semiconductor manufacturers depended on machinery from Japan and the Netherlands, in particular. Since then, modernization has come to a standstill.
The fineness of the circuits on the chips is measured in nanometers. The fewer nanometers, the faster and more energy-efficient the chip. Current processors are currently manufactured in the 7-nanometer range. Modern graphics cards and many AI applications use 5-nanometer chips, while the heart of the new iPhone is 3 nanometers. Even two nanometers are already possible, and the industry is approaching the 1-nanometer mark. China, on the other hand, is stuck at 7 nanometers and is also having problems scaling up production here.
When TSMC from Taiwan and Samsung from South Korea go into mass production with 2-nanometer chips next year, China will have reached around 5 nanometers, estimates Dan Hutcheson, Vice Chair of the US portal TechInsights. This means the gap will remain for quite some time.
A country left to its own devices is always at a disadvantage. Even chip machine manufacturer ASML from the Netherlands needs German suppliers for special parts. “You need the entire world’s population to find the brightest people and get them in the right places,” says Hutcheson.
A recent analysis of China’s semiconductor technology confirms that the country is around three years behind Taiwan’s industry leader, TSMC, in terms of technology. The Japanese business newspaper Nikkei cites the Tokyo-based semiconductor research company TechanaLye. It compared two smartphone processors from Huawei phones. One is from 2024, the other from 2021, with the older chip still made by the Taiwanese company and the newer one from Semiconductor Manufacturing International Corporation (SMIC) in Shanghai.
The result of the analysis: The chips, developed three years apart, are at roughly the same level. The older Taiwanese model is even slightly more modern in that it was manufactured using the 5-nanometer process. The newer one from China measures 7 nanometers, currently the country’s maximum capability.
But a lot can already be done with 7 nanometers. One example is Huawei’s AI chips. Its Ascend processor is directly replacing the products of global market leader Nvidia in China. However, it is not about smartphones, but about artificial intelligence, i.e., the training and application of neural networks for language models or image recognition, for example.
The processing power of the Chinese Ascend chip is similar to that of US products, although developers working with it still encounter various teething problems. For example, the interaction between the software and Huawei’s chips is not as smooth as with Nvidia. However, such technical issues can be solved if Huawei’s engineers have enough time to deal with them.
Although the Chinese leadership pushes for success, it also has a long-term perspective. A delay of several years may seem like an eternity in the fast-paced world of technology. However, compared to the 5, 10, 50 or even 100-year plans for economic development, these are relatively short timeframes.
Perhaps China does not even need the ultimate cutting-edge technology to achieve its goals. Much attention is currently focused on the question of when China will finally catch up with Taiwan and be able to produce processors in the same nanometer range. But that is probably not the decisive factor. Much more important is when China will be able to build large quantities of sufficiently powerful processors for the bulk of industrial applications. That time will come much sooner.
The overall picture is that SMIC’s capabilities are approaching the technologies developed by TSMC, with the Chinese semiconductor industry showing significant progress. China’s efforts to strengthen domestic production have led to a significant increase in investment in semiconductor equipment, despite US regulations. Chinese companies accounted for a good third of global chip equipment spending in 2023. This demonstrates the limits of US efforts to slow down the development of cutting-edge Chinese chips.
This development could significantly impact the industry, especially as TSMC increasingly struggles to maintain its technological edge over Chinese competitors. According to TechanaLye, US regulations to date have only slightly slowed down Chinese innovation while even boosting the Chinese chip industry’s efforts to increase domestic production.
Here, China is also focusing on what is feasible, and there is still plenty of leeway: The sanctions only affect chips of the highest quality. The country is frantically buying manufacturing equipment where imports are still permitted. According to data from the global semiconductor industry association SEMI, China spent more on chip manufacturing equipment in the first half of 2024 than South Korea, Taiwan and the USA combined.
SEMI reports that China, the world’s largest market for semiconductor equipment, spent a record 25 billion US dollars on chip manufacturing machinery in the first six months of 2024. Spending remained high in July, so China may be on track for another record year.
Sinolytics is a research-based business consultancy entirely focused on China. It advises European companies on their strategic orientation and specific business activities in the People’s Republic.
On Tuesday, Russia launched a large-scale naval exercise involving more than 400 ships at various locations. According to a report by the Russian news agency Tass, President Vladimir Putin will monitor the exercise via video link. The exercise is codenamed “Ocean 2024.” Four Chinese warships and a logistics ship have joined Russian units near the Sea of Japan.
Four Chinese warships and a logistics ship have joined Russian units near the Sea of Japan. The exercises are reminiscent of the Soviet Union’s largest naval exercises in the 1970s and 1980s, which were also carried out under the name “Ocean.” Maneuvers with warships, submarines and over 120 naval aircraft are planned. More than 90,000 soldiers will be involved.
The exercises are reminiscent of the Soviet Union’s largest naval exercises in the 1970s and 1980s, which also bore the name “Ocean.” Plans include maneuvers with warships, submarines, and over 120 naval aircraft, involving more than 90,000 troops. The exercises will take place in the Pacific, the Arctic Ocean, the Mediterranean, the Caspian Sea and the Baltic Sea until 16 September, thus spanning the entire Russian Arctic Ocean. Only the Black Sea is not part of the exercises, as Ukrainian drones have repeatedly attacked Russian ships in recent months.
Since the start of the Ukraine war in February 2022, Moscow and Beijing have intensified their military and economic partnership. Previously, Chinese and Russian naval forces had already held joint exercises in the western and northern Pacific. According to the Chinese Ministry of Defence, these exercises were part of an annual plan and were not directed against any third party. fin
What may seem like a temple is the Beer Niu, a craft beer museum docked onto a concert venue in Nanjing. In the early 2000s, craft beers only accounted for around one percent of the national beer market. Today, more than 13,000 companies in China brew their own beer. And even large companies such as Tsingtao have long since jumped on the bandwagon. Anyone who wants to learn more about China’s beer market – the fastest growing in the world – should visit China Brew China Beverage (CBB), a beer trade fair that will be held at the Shanghai New International Expo Center from 28 to 31 October 2024.
It is with a heavy heart that I bid farewell as editorial director today. After over three and a half years, I will leave Table.Media at the end of the month. I am very grateful to have been given the opportunity to help build a unique China medium. Nowhere else do China observation and journalism come together in such depth. In a time of ever-increasing polarization, it was liberating to have the breathing space for differentiation and a wide range of views in one medium.
We started amid the pandemic under difficult conditions for editorial collaboration and research. Since then, China.Table has undergone various changes and adaptations to become the information product you see before you today. After all, the perception of the China dilemma has shifted several times during this time.
To this day, China.Table sees a crucial part of its work in understanding the changes that Xi Jinping has brought to China’s relationship with the world. It is about applying his systemic understanding to the economies and policies of the West and Germany. However, due to the experiences during the pandemic, supply chain security was also a prominent topic from the very beginning. The Russian invasion of Ukraine then brought geopolitical risks to the fore.
Technological and economic competition with China has recently taken up most of the space. The People’s Republic has caught up with the West in terms of technology. VW’s current woes are a symptom of falling behind a strong competitor.
This is also the topic of today’s issue: China’s progress in the production of high-performance microprocessors despite US sanctions. On the one hand, we look at the methods the state has used to create its own semiconductor industry through industrial policy. And on the other, a top product that has emerged from this: Huawei’s new smartphone, which outshines even the flagship models from Samsung and Apple.
In fact, these developments are trends that the members of the Table editorial team have repeatedly pointed out early on – even when they were still working for other publications. At Table.Briefings, this expertise finds a focal point. I would therefore like to thank my wonderful colleagues from the Table editorial team for the time we have shared. The whole is more than the sum of its parts: We pass the ball to each other across editorial boundaries and thus create a unique added value. Journalism thrives on competent minds, especially the Deep Journalism that Table.Media stands for.
I am looking forward to remaining a part of the China.Table project as a reader.
Huawei stole the show from Apple with the launch of a new super smartphone, which coincided with the launch of the iPhone 16 in China. The Chinese technology giant unveiled the Mate XT at an event on Tuesday. What makes it so special is that it is the world’s first double-folding smartphone.
When folded up, it looks like a regular smartphone. But unfolded, it is almost as big as a tablet with its three-part display. Huawei’s marketing team already teased the new product on social media in the past few days – and cleverly set the product launch date just a few hours after the Apple event in Cupertino, where the new iPhone 16 and other product updates were unveiled.
As anticipated, Apple only presented minor improvements to its devices. However, in China, where the US company has been struggling with declining sales, this is unlikely to be enough to bring about a turnaround. In the battle between Apple and Huawei, there has been a trend shift towards Chinese brands, just as with VW versus BYD.
Chinese Apple fans were particularly disappointed that the iPhone’s new AI functions, Apple Intelligence, will not be available in China for the time being. The same applies to Europe. Initially, the service will only be available in the USA. And even there, it won’t be available right away.
In the West, ChatGPT services are used for the AI functions. However, ChatGPT is not available in China. Apple has not yet revealed how it intends to bring AI to mobile phones in China. On the other hand, Chinese smartphone providers have either already introduced their own AI solutions for their new generation of devices (including Huawei) or have teamed up with tech companies such as Baidu.
Loyal iPhone buyers in China are still in the dark about what Apple will offer them. “Why should you buy it if you can’t use AI?” one user wrote on Weibo. Another commented: “Without AI as the biggest selling point, it should be half the price.”
On the other hand, Huawei showed how not to bore its customers. On Tuesday, the company’s website revealed that it had already received over 3.6 million pre-orders for the new Mate XT. That would be a tremendous success. Although foldable phones are more common in China than in Europe or the USA, the market here is still relatively small overall due to the prices. Huawei is asking a steep 19,999 RMB (around 2,500 euros) as the entry-level price.
The launch of the new model, which follows a series of successful smartphone presentations since last year, underlines Huawei’s ability to survive and even thrive despite US sanctions. The Shenzhen-based company has gone through difficult years with a heavy slump in sales in the smartphone business after the US was no longer allowed to supply Huawei with key Western technology.
The turning point in the smartphone market came almost exactly a year ago. At that time, Huawei presented its current flagship smartphone, the Mate 60 Pro – coinciding with the visit of US Secretary of Commerce Gina Raimondo to China. This timing was highly symbolic, as the Mate 60 Pro contains advanced Chinese semiconductor technology.
Although the Chinese-made chips used in the phone cannot yet keep up with those of the iPhone, the overall package is impressive. It was particularly important that Huawei’s Mate 60 Pro could once again offer 5G connectivity for fast internet in its devices. This was not possible for some time because of the lack of components due to the US sanctions.
Business is now booming again for Huawei: The company from Shenzhen in southern China sold 18 million smartphones in the last quarter alone. While Huawei is on the upswing, Apple is now struggling with weak sales figures in China. In the Chinese smartphone sales ranking, Apple fell from rank three to rank six in the second quarter, while Huawei rose to rank three thanks to strong sales of its latest smartphones.
The Chinese government is bundling and accelerating the development of its own capabilities for building high-performance microprocessors. Sanctions against China’s semiconductor industry, such as those imposed by the USA, Japan and the Netherlands, may lose their effect sooner than expected.
Since May, investments have been flowing from the third phase of the National Integrated Circuit Industry Investment Fund, also known as the Big Fund 3.0. On the one hand, these funds go to established manufacturers who have been perfecting older technology and offering it in large numbers. On the other hand, the industry’s most innovative players also receive money from the fund. Their mission: To catch up with Western companies and initiate a process of “de-Americanization.” Xi Jinping wants to make China independent of US technology.
The chip sanctions have hit China hard. No modern technology can manage without fast processors. China’s semiconductor manufacturers depended on machinery from Japan and the Netherlands, in particular. Since then, modernization has come to a standstill.
The fineness of the circuits on the chips is measured in nanometers. The fewer nanometers, the faster and more energy-efficient the chip. Current processors are currently manufactured in the 7-nanometer range. Modern graphics cards and many AI applications use 5-nanometer chips, while the heart of the new iPhone is 3 nanometers. Even two nanometers are already possible, and the industry is approaching the 1-nanometer mark. China, on the other hand, is stuck at 7 nanometers and is also having problems scaling up production here.
When TSMC from Taiwan and Samsung from South Korea go into mass production with 2-nanometer chips next year, China will have reached around 5 nanometers, estimates Dan Hutcheson, Vice Chair of the US portal TechInsights. This means the gap will remain for quite some time.
A country left to its own devices is always at a disadvantage. Even chip machine manufacturer ASML from the Netherlands needs German suppliers for special parts. “You need the entire world’s population to find the brightest people and get them in the right places,” says Hutcheson.
A recent analysis of China’s semiconductor technology confirms that the country is around three years behind Taiwan’s industry leader, TSMC, in terms of technology. The Japanese business newspaper Nikkei cites the Tokyo-based semiconductor research company TechanaLye. It compared two smartphone processors from Huawei phones. One is from 2024, the other from 2021, with the older chip still made by the Taiwanese company and the newer one from Semiconductor Manufacturing International Corporation (SMIC) in Shanghai.
The result of the analysis: The chips, developed three years apart, are at roughly the same level. The older Taiwanese model is even slightly more modern in that it was manufactured using the 5-nanometer process. The newer one from China measures 7 nanometers, currently the country’s maximum capability.
But a lot can already be done with 7 nanometers. One example is Huawei’s AI chips. Its Ascend processor is directly replacing the products of global market leader Nvidia in China. However, it is not about smartphones, but about artificial intelligence, i.e., the training and application of neural networks for language models or image recognition, for example.
The processing power of the Chinese Ascend chip is similar to that of US products, although developers working with it still encounter various teething problems. For example, the interaction between the software and Huawei’s chips is not as smooth as with Nvidia. However, such technical issues can be solved if Huawei’s engineers have enough time to deal with them.
Although the Chinese leadership pushes for success, it also has a long-term perspective. A delay of several years may seem like an eternity in the fast-paced world of technology. However, compared to the 5, 10, 50 or even 100-year plans for economic development, these are relatively short timeframes.
Perhaps China does not even need the ultimate cutting-edge technology to achieve its goals. Much attention is currently focused on the question of when China will finally catch up with Taiwan and be able to produce processors in the same nanometer range. But that is probably not the decisive factor. Much more important is when China will be able to build large quantities of sufficiently powerful processors for the bulk of industrial applications. That time will come much sooner.
The overall picture is that SMIC’s capabilities are approaching the technologies developed by TSMC, with the Chinese semiconductor industry showing significant progress. China’s efforts to strengthen domestic production have led to a significant increase in investment in semiconductor equipment, despite US regulations. Chinese companies accounted for a good third of global chip equipment spending in 2023. This demonstrates the limits of US efforts to slow down the development of cutting-edge Chinese chips.
This development could significantly impact the industry, especially as TSMC increasingly struggles to maintain its technological edge over Chinese competitors. According to TechanaLye, US regulations to date have only slightly slowed down Chinese innovation while even boosting the Chinese chip industry’s efforts to increase domestic production.
Here, China is also focusing on what is feasible, and there is still plenty of leeway: The sanctions only affect chips of the highest quality. The country is frantically buying manufacturing equipment where imports are still permitted. According to data from the global semiconductor industry association SEMI, China spent more on chip manufacturing equipment in the first half of 2024 than South Korea, Taiwan and the USA combined.
SEMI reports that China, the world’s largest market for semiconductor equipment, spent a record 25 billion US dollars on chip manufacturing machinery in the first six months of 2024. Spending remained high in July, so China may be on track for another record year.
Sinolytics is a research-based business consultancy entirely focused on China. It advises European companies on their strategic orientation and specific business activities in the People’s Republic.
On Tuesday, Russia launched a large-scale naval exercise involving more than 400 ships at various locations. According to a report by the Russian news agency Tass, President Vladimir Putin will monitor the exercise via video link. The exercise is codenamed “Ocean 2024.” Four Chinese warships and a logistics ship have joined Russian units near the Sea of Japan.
Four Chinese warships and a logistics ship have joined Russian units near the Sea of Japan. The exercises are reminiscent of the Soviet Union’s largest naval exercises in the 1970s and 1980s, which were also carried out under the name “Ocean.” Maneuvers with warships, submarines and over 120 naval aircraft are planned. More than 90,000 soldiers will be involved.
The exercises are reminiscent of the Soviet Union’s largest naval exercises in the 1970s and 1980s, which also bore the name “Ocean.” Plans include maneuvers with warships, submarines, and over 120 naval aircraft, involving more than 90,000 troops. The exercises will take place in the Pacific, the Arctic Ocean, the Mediterranean, the Caspian Sea and the Baltic Sea until 16 September, thus spanning the entire Russian Arctic Ocean. Only the Black Sea is not part of the exercises, as Ukrainian drones have repeatedly attacked Russian ships in recent months.
Since the start of the Ukraine war in February 2022, Moscow and Beijing have intensified their military and economic partnership. Previously, Chinese and Russian naval forces had already held joint exercises in the western and northern Pacific. According to the Chinese Ministry of Defence, these exercises were part of an annual plan and were not directed against any third party. fin
What may seem like a temple is the Beer Niu, a craft beer museum docked onto a concert venue in Nanjing. In the early 2000s, craft beers only accounted for around one percent of the national beer market. Today, more than 13,000 companies in China brew their own beer. And even large companies such as Tsingtao have long since jumped on the bandwagon. Anyone who wants to learn more about China’s beer market – the fastest growing in the world – should visit China Brew China Beverage (CBB), a beer trade fair that will be held at the Shanghai New International Expo Center from 28 to 31 October 2024.
