Protocol | China

China’s plan to leapfrog foreign chipmakers: Wave goodbye to silicon

Moore's Law could soon be a dead letter. That's fine by Beijing.

A chip in a hand

The idea that dominant chip makers — who are overwhelmingly foreign — face a near-certain obstacle has become a beacon of hope for Chinese firms, which analysts say lag at least one to two wafer generations behind their competitors.

Image: Niek Doup / Protocol

A new concept is on the lips of everyone in China's semiconductor industry: the "Post-Moore's Law Era." It's a term that conveys not frustration, but rather hope for China's ability to someday surpass the West's indigenous chip capacity.

Since its initial mention by Chinese Vice Premier Liu He at a meeting on innovation in digital electronics in May, it has been quoted with regularity by Chinese academics, municipal governments, industry journals, private companies and other observers concerned with China's lackluster standing in the global chip sector.

The idea is simple: By 2025, scientists believe, advances in chip technology will no longer keep up with Moore's Law. Coined by Intel co-founder Gordon Moore, the rule states that transistors per unit area double every one to two years. While Moore's prediction has so far proven accurate during an era of dramatic improvements in chip performance, in the future engineers expect to hit the physical limits of existing chip materials, such as silicon. That will result in a drop-off in chip technology advancements unless alternatives are devised.

The idea that dominant chip makers — who are overwhelmingly foreign — face a near-certain obstacle has become a beacon of hope for Chinese firms, which analysts say lag at least one to two wafer generations behind their competitors. For example, research conducted by the U.S.-based think tank Information Technology & Innovation Foundation (ITIF) suggests that, in logic chips, Semiconductor Manufacturing International Corporation (SMIC), China's largest chipmaker, manages scale production at the 14nm level, whereas South Korean Samsung and Taiwan-based TSMC are able to accomplish 5nm. On the memory chip side, U.S.-based Micron and Samsung lead with 10nm wafers, while China's best, Changxin Memory Technologies, only manages 19nm.

To pin down the next fundamental semiconductor material, whatever that may be, could give Chinese firms a shortcut to competitiveness or even allow them to leapfrog foreign competitors.

To this end, Beijing has announced it will research alternative substances to help its advanced chip technology drive.

In August, China's Ministry of Industry and Information Technology unveiled plans to include "carbon-based materials" in its plan to achieve "breakthrough" technologies. Namely, the ministry will incorporate carbon fiber, graphene, silicon carbide and other carbon-based composites into the country's 14th Five-Year Plan's raw materials development strategy as well as its 14th FYP's scientific innovation strategy.

It marks China's highest-level backing of this research to date, after various industry observers, including the MIIT's own affiliated technology journal, discussed the possibilities such materials presented in a series of articles exploring the "Post-Moore's Law Era."

"We need more breakthroughs in theoretical research, especially in the fields of compound semiconductor and material science, which are led by the U.S. and Japan," Huawei founder Ren Zhengfei said during a private speech at an August innovation summit.

"If we pursue only what's practical, we may forever lag behind," Ren said.

Not tried and true

Even with support from the central government, there's no guarantee China will pull ahead in semiconductors. For one, pursuing unproven technologies would mark a drastic new business model for China's wafer companies, for whom R&D has not traditionally been a priority.

For one, the country continues to throw money at manufacturing over design. During its first phase spanning 2014 to 2019, the giant, state-led National Integrated Circuit Industry Investment Fund, which raised a total of RMB 138.7 billion (USD $21.7 billion), spent two-thirds of its invested funds on fabrication companies. According to German think tank Stiftung Neue Verantwortung, as of mid-2020, less than 1% of the fund's investments were made in domestic electronic design automation (EDA), software tools used to draw up new chips.

Similarly, according to ITIF, R&D at Chinese semiconductor companies accounted for just over 8% of sales in 2018, in contrast with U.S. firms' 18%, EU companies' 14% and Taiwanese firms' 10%. Likewise, Chinese companies held just over 6% of the semiconductor patents granted by the United States Patent and Trademark Office in 2018, a fraction of those granted to firms based in the U.S., Japan, Taiwan and South Korea, with 29%, 23%, 17% and 14% respectively.

"If you're getting 40% of your revenues, as SMIC is, from the Chinese government, then you have a source of income that isn't as reliant or dependent upon you innovating the next generation of products," ITIF Vice President of Global Innovation Policy Stephen Ezell said during an online seminar in July.

Yangyang Cheng, a postdoctoral fellow at Yale Law School who researches the history of science in China, echoed this sentiment. "This kind of hardware development takes a very long time," she told Protocol.

Making reference to China's history of persecuting scientists and intellectuals, especially under Mao Zedong's rule, Cheng said that the country has hamstrung its own progress relative to those that never stopped chasing tech advancements.

"If there's a few decades being lost because of political campaigns or different kinds of strategies, then this is time that will be paid for later," she said.

What's more, Cheng said, the emphasis on speed disincentivizes unglamorous fundamental research in favor of sensational claims, such as in the case of a distinguished, young Chinese computer scientist who declared he had created one of the country's first microchips in 2003, later discovered to be based on a design by Motorola.

"These seem like isolated incidents, but … [they] speak to some systemic issues and play into the current state where China does lag behind," Cheng said.

Separation anxiety

To be sure, China continues to court foreign companies despite the decoupling rhetoric, export restrictions and scrutiny in merger and acquisition attempts from a growing number of Western governments, calling into question the vehemence of the new R&D push.

Data from the Chinese Ministry of Commerce shows that, in 2020, China's overseas tech investments jumped. According to its September report on last year's outbound foreign direct investments, spending on information transmission, software and IT service industries grew 67.7% year-over-year to $9.19 billion, while investments in overseas scientific research and technical service industries also grew 8.7% YOY, to $3.73 billion.

At home, meanwhile, the MOC is pressing foreign companies, including Intel, Germany's Infineon, French-Italian STMicroelectronics, U.S. chip industry association SEMI and others on cross-border collaboration. Items on its wishlist include core IP, tech transfers, EDA, packaging, production, training and more.

These kinds of partnerships, along with trends such as talent acquisition from foreign firms, universities and Silicon Valley remain gray areas where governments are slow to respond, according to Dylan Patel, chief analyst at SemiAnalysis, who characterized some of these efforts as "poaching."

However, given the high precision required of semiconductors, making disruption by carbon materials potentially "10 years away forever," the battle for the foreseeable future will remain in the realm of existing chip technologies that are not exclusive to the most advanced companies, he said.

"The majority of chips made are not bleeding edge, so you can eat that value chain and move up," Patel said, citing China's continued appetite for chip manufacturing. "For China it's very important to transition from the current [industrial society] to services, to an industrial powerhouse. This sort of transition needs to happen or the economy will stagnate, so these sorts of investments need to be made."

Protocol | Workplace

CTO to CEO: The case for putting the tech expert in charge

Parag Agrawal is one of the few tech industry CTOs to nab the top job. But the tides may be shifting.

Parag Agrawal’s appointment to Twitter's CEO seat is already alerting a new generation of CTOs that the top job may not be so out of reach.

Photo: Twitter

Parag Agrawal’s ascension to CEO of Twitter is notable for a few reasons. For one, at 37, he’s now the youngest CEO of an S&P 500 company, beating out Mark Zuckerberg. For another, his path to the top as a CTO-turned-CEO is still relatively rare in the corporate world.

His leap suggests that CEO succession trends may be shifting, as technology increasingly takes the center stage in business and strategy decisions not just for tech companies, but for the business world more broadly.

Keep Reading Show less
Michelle Ma

Michelle Ma (@himichellema) is a reporter at Protocol, where she writes about management, leadership and workplace issues in tech. Previously, she was a news editor of live journalism and special coverage for The Wall Street Journal. Prior to that, she worked as a staff writer at Wirecutter. She can be reached at

The fintech developers who made mobile banking as routine as texting or online shopping aren't done. The next frontier for innovation is open banking – fintech builders are enabling consumers to be at the center of where and how their data is used to provide the services they want and need.

Most people don't even realize they're using open banking services today. If they connected their investment and banking accounts in a personal financial management solution or app, they're using open banking. Perhaps they've seen ads about how they can improve their credit score by uploading pay stubs or utility records to that same app – this is also powered by open banking.

Keep Reading Show less
Bob Schukai
Bob Schukai is Executive Vice President of Technology Development, New Digital Infrastructure & Fintech at Mastercard, where he leads the technical design, execution and support of innovative open banking and fintech solutions, as well as next generation technologies to support global payment and data capabilities. Prior to Mastercard, Schukai’s work focused on cognitive computing, financial technology, blockchain, user experience and digital identity. He is also a member of the Institute for Electrical and Electronics Engineers.
Protocol | Workplace

Google contractor says she was fired for 'ungoogley' behavior

According to a charge filed with the National Labor Relations Board, "ungoogley" is Google's term for having a bad attitude.

A contractor at Google staffing firm Modis claims she was fired from her job after asking about pay.

Photo: Future Publishing/Getty Images

A contractor at Google staffing firm Modis claims she was fired from her job for "ungoogley" behavior after asking about holiday pay at a meeting with management, according to a charge filed with the National Labor Relations Board by a lawyer for the Alphabet Workers Union.

Tuesday Carne said in an interview with Protocol that she was fired after just nine days of working in the data contracting facility in South Carolina. Carne's termination letter (which Protocol reviewed) called her behavior at the meeting "unacceptable and 'ungoogley'" and claimed that her behavior was the reason for her firing.

Keep Reading Show less
Anna Kramer

Anna Kramer is a reporter at Protocol (Twitter: @ anna_c_kramer, email:, where she writes about labor and workplace issues. Prior to joining the team, she covered tech and small business for the San Francisco Chronicle and privacy for Bloomberg Law. She is a recent graduate of Brown University, where she studied International Relations and Arabic and wrote her senior thesis about surveillance tools and technological development in the Middle East.

Protocol | Policy

Biden FCC nominee Sohn is walking a tightrope with Republicans

Gigi Sohn faces plenty of GOP opposition, but the longtime net-neutrality advocate is hoping to pick up a little Republican support as she deals with Democrats’ narrow margins.

Gigi Sohn’s work for net neutrality has become an issue in her confirmation hearings for the FCC.

Photo: Alex Wong/Getty Images

Gigi Sohn wouldn’t mind getting support from a Republican or two, and it’d certainly make her path back to the Federal Communications Commission easier.

During her Senate Commerce Committee confirmation on Wednesday, Sohn, a progressive favorite and longtime net-neutrality advocate, touted her commitment to ensuring a diversity of voices on the airwaves, her past fights for small conservative networks she personally disagrees with and her habit of socializing with those she battles on policy.

Keep Reading Show less
Ben Brody

Ben Brody (@ BenBrodyDC) is a senior reporter at Protocol focusing on how Congress, courts and agencies affect the online world we live in. He formerly covered tech policy and lobbying (including antitrust, Section 230 and privacy) at Bloomberg News, where he previously reported on the influence industry, government ethics and the 2016 presidential election. Before that, Ben covered business news at CNNMoney and AdAge, and all manner of stories in and around New York. He still loves appearing on the New York news radio he grew up with.

Protocol | Workplace

Microsoft Teams is going after small businesses

Microsoft Teams Essentials offers longer, bigger meetings for a relatively small price tag.

Companies can now buy a standalone version of Teams.

Photo: Mika Baumeister/Unsplash

Microsoft announced Wednesday that companies can now buy a standalone version of Teams — one of its most important products and a major player in work messaging and video chat, alongside Slack and Zoom. The product, called Microsoft Teams Essentials, aims to give small or medium-sized businesses a communication hub that costs less than its competitors'.

Microsoft will charge small businesses $4 per user per month for Microsoft Teams Essentials, while Zoom’s cheapest paid plan is $14.99 per user per month and Slack’s is $6.67 per user each month, when billed annually. The free version of Microsoft Teams still exists, as do the various other Microsoft 365 plans that include Teams. Teams Essentials offers longer meeting times, larger group meetings and more cloud storage.

Keep Reading Show less
Lizzy Lawrence

Lizzy Lawrence ( @LizzyLaw_) is a reporter at Protocol, covering tools and productivity in the workplace. She's a recent graduate of the University of Michigan, where she studied sociology and international studies. She served as editor in chief of The Michigan Daily, her school's independent newspaper. She's based in D.C., and can be reached at

Latest Stories