Expert: Full semi-conductor self-sufficiency unnecessary

Updated 2018-05-15 10:16:03

The fluctuating story of Chinese telecom equipment maker ZTE is a "wake-up call" for China to spur its own chip drive, but aiming for "100 percent self-sufficiency in the semi-conductor industry" is a wrong idea, according to Jay Huang, founding partner of Jadestone Capital and former managing director of Intel China.

"The whole semi-conductor industry is divided into different categories," Huang said. He added that China is catching up with the world leaders in design, but still faces large gaps in other categories such as equipment and materials.

In that case, ZTE crisis is definitely positive for the industry in China, Huang told CGTN, however, noting that all countries should produce goods with comparative advantages as they are all inter-dependent with each other in the global value chain.

"You don't have to produce everything 100 percent in your own country. You only do what you are good at. So that's why thinking about 100 percent self-sufficiency for everything is wrong," Huang explained.

As an investor in semi-conductors, Huang admitted that it is hard to make profits in the semi-conductor industry. But from his perspective, the semi-conductor industry in China has more potential than in the U.S..

In fact, compared with US investors, investors in an A-share market are more willing to invest in semi-conductor companies, Huang said, "That means the ceiling [for semi-conductor companies] in China is much higher than in the US, which means more opportunities."

The ZTE crisis seems to be averted for now, as U.S. President Donald Trump tweeted on Sunday that Washington and Beijing are working to get ZTE back into business. China's Foreign Ministry responded later on Monday that China highly appreciates the US position on ZTE.

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