10 Years Since China's 'Manufacturing 2025' Declaration... A Sequel is Coming

Chinese information technology (IT) giants, which were expected to face difficulties in developing and operating artificial intelligence (AI) due to U.S. semiconductor export restrictions, are adapting to changes and continuing AI development. Big tech companies are improving the software sector to overcome physical limitations and are focusing on Chinese semiconductors to replace American ones. China has also decided to embark on a second manufacturing revival.

On the 27th, U.S. media reported that China is preparing a follow-up plan to its manufacturing revival plan 'Made in China 2025', which was implemented from 2015 to 2025. In the new plan, China will focus on developing advanced technologies, including semiconductor manufacturing equipment, over the next 10 years.

In May 2015, China announced the 'Made in China 2025' plan to develop core technologies in 10 major industries. The goal was to transform China from a 'manufacturing giant' to a 'manufacturing powerhouse'. The 10 major industries included next-generation IT, aerospace equipment, rail and power equipment, agricultural machinery, new materials, biopharmaceuticals, and high-performance medical devices. Over the past 10 years, Chinese companies have become world leaders in some industries such as drones, electric vehicles, batteries, and solar panels. It is analyzed that China aims to become a global powerhouse in advanced fields such as semiconductor equipment and chips, which are essential for AI.

China has already established an independent ecosystem related to semiconductors.

On the 26th (local time), U.S. economic media CNBC focused on the AI development strategies of Chinese big tech companies, including Tencent and Baidu. Gaurav Gupta, a semiconductor analyst at the U.S. market research firm Gartner, diagnosed that Chinese companies stockpiled semiconductors before the sanctions and that although Chinese semiconductor technology lags behind the U.S., there have been recent technological advancements.

Since 2016, Tencent has been developing its own AI model 'Hunyuan'. At the first-quarter earnings announcement on the 14th, Tencent Chairman Liu Zhiping emphasized that the semiconductor inventory for AI development is "quite solid." He argued that unlike U.S. companies, which aim for more semiconductors for AI development, Tencent can develop AI with fewer numbers. Liu Zhiping stated that Tencent can continue AI development through software optimization, AI model miniaturization, and the use of custom-made semiconductors made in China.

The U.S. Biden administration blocked U.S. companies, including Nvidia, from exporting high-performance AI-related semiconductors to China in 2022. In response, Nvidia separately manufactured and exported low-spec semiconductors (H20) for China. U.S. President Donald Trump, who took office this year, decided to regulate these China-specific semiconductor exports from last month.

Baidu, which develops the AI model 'Ernie' series, also stated at the first-quarter earnings announcement on the 21st that there is no need to worry about semiconductors. Dou Shen, head of Baidu's AI Cloud division, emphasized that Baidu has a 'full-stack' system that provides AI-related services such as physical data centers, AI training, search, and cloud computing to customers at once. He predicted that "the combination of Chinese semiconductors and software will be a strong foundation for innovation in the Chinese AI ecosystem."

pjw@fnnews.com Park Jong-won