Tencent wants to bolster China’s chip and semiconductor industry

In light of the recent sanctions against ZTE, Tencent has pledged to work to build China’s own chip and semi-conductor industry. Reuters reports that Tencent’s leadership called the recent actions against ZTE a “wake-up” call and said that Chinese firms should not have to rely solely upon foreign suppliers.

“The recent ZTE incident made everyone more clearly realize that however advanced one may be in mobile payment, without the mobile, the chips and the operating system, you still cannot compete,” said Tencent’s Pony Ma.

Tencent, a Chinese gaming and social media company, is one of Asia’s most valuable firms, and it operates the popular WeChat app. Tencent’s efforts could include using the data collected from WeChat to help Chinese chip makers come up with better chips or encourage WeChat app developers to use chips made in China when developing their software. Ma said that he would like for Tencent to get involved with making chips itself, but admitted that was a bit outside the company’s area of expertise.

“It would probably be better if we could get in to support semiconductor R&D, but that is perhaps admittedly not our strong suit and may need the help of others in the supply chain,” Ma said.

The U.S. is working with China and ZTE to resolve the issues involving the import ban, but Ma warned that Chinese companies should not ” not lose vigilance at this time and should pay more attention to fundamental scientific research.”

China’s rapidly grow tech sector is currently heavily reliant on imports when it comes to the production of things such as smartphones and computers. China’s domestic chip market is currently so underdeveloped that ZTE is in danger of going out of business if the U.S. does not lift the company’s import ban. The Chinese government is aware that the country is struggling in this area and has taken steps to help bolster its semiconductor industry. One of the more recent actions taken is to invite foreign investors to invest in the country’s state-backed chip fund. As of right now, however, the country is still heavily reliant on imports.

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