Published on: Saturday, March 16, 2024From BYD to Nio Inc, various carmakers have relied on Nvidia processors to coordinate functions in their hyper-connected vehicles. The Chinese government has quietly asked electric-vehicle makers from BYD Co to Geely Automobile Holdings Ltd to sharply increase their purchases from local auto chipmakers, part of a campaign to reduce reliance on Western imports and boost China’s domestic semiconductor industry.
The ministry is now directly instructing firms to avoid foreign semiconductors if at all possible, said the people, who asked to remain anonymous discussing sensitive information.That means overseas chip firms effectively have to manufacture their silicon through a local foundry such as Semiconductor Manufacturing International Corp or Hua Hong Semiconductor Ltd, one of the people said.
The Chinese directive on cars casts uncertainty over the business of companies from Nvidia Corp and NXP Semiconductor NV to Renesas Electronics Corp and Texas Instruments Inc, which compete with local firms to supply the world’s largest EV market. Beijing is increasingly intent on supporting a domestic chip industry it knows is lagging well behind foreign rivals, but critical to supporting the economy and maintaining a geopolitical advantage.
A mandate in favour of Chinese chips also raises the prospect of further retaliation as Washington ramps up its containment campaign. China’s biggest auto chip and software providers include Huawei, Loongson Technology Corp, GigaDevice Semiconductor Inc and Wingtech Technology Co.
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