China seeks to improve reliability of its chip manufacturing sector

China’s Ministry for Industry and Information Technology has said it wants to improve the country’s manufacturing capabilities, singling out the production of advanced semiconductor materials and automotive chips as areas that are in need of improvement.

In its recently released Opinions on Manufacturing Reliability Improvement report, the department said it was putting forward a plan that would make up for the shortcomings of basic product reliability and improve the quality of core components in three industries: machinery, electronics, and automotive.

Although the report said that Chinese manufacturing has seen improvements, it noted that “generally speaking, there is still a gap between the reliability of [the] country's manufacturing industry and the advanced level of foreign countries.”

China is currently locked in a trade war with the US, after President Biden’s administration issued widespread restrictions on the exports of chips to China over fears that the Chinese government would use the technology to further its military modernization efforts or carry out human rights abuses.

The rules also prohibit US businesses from trading with non-US companies that export chips to China, a move that has caused some friction and prevented semiconductor manufacturers such as ASML and Arm unable to sell to what was previously one of their largest markets.

Late last month, it was reported that the US is set to impose further restrictions on the export of chips to China, requiring semiconductor manufacturers to obtain a special US export license before being allowed to sell their products to the sanctioned country.

“Restrictions prohibiting the sale of our datacenter GPUs to China, if implemented, would result in a permanent loss of opportunities for US industry to compete and lead in one of the world’s largest markets and impact on our future business and financial results,” Nvidia’s CFO Colette Kress said when the news was first reported.