China enlists Alibaba and Tencent in fight against US chip sanctions

China enlists Alibaba and Tencent in fight against US chip sanctions

China has tapped tech giants Alibaba and Tencent to help it design semiconductor chips, as Beijing braces for new US sanctions aimed at suppressing Chinese computing power.

The Chinese government has set up a consortium of companies and research institutes, including the Chinese Academy of Sciences, to create new intellectual property on the chips. Beijing wants to reduce its dependence on Arm, owned by SoftBank, whose technology underpins the majority of semiconductors in the world.

The group uses Risc-V – pronounced “Risc-five” – ​​an open-source chip design architecture created in 2010 by the University of California, Berkeley. Risc-V has become a competitor to Arm in recent years.

Open source code can be produced, viewed, used and improved by anyone.

Beijing’s interest in Risc-V grew as Washington increased pressure on China’s tech sector by limiting access to chip components and cutting-edge machinery.

The United States has pressured its allies, including the Netherlands and Japan, to exclude Chinese tech companies from their supply chains, as it did with Huawei in 2019. This has led China to prepare for further disruptions in the semiconductor supply chain.

Arm, which is headquartered in the UK but has significant operations in the US, is seen as vulnerable to any escalation of US sanctions on Beijing because it supplies its designs to Chinese tech companies.

A Chinese official said the government-led effort to pool resources on Risc-V-based chip design would put China on the “right path”. The official added that the fragmented nature of Risc-V’s development — hundreds of different companies use its open-source software architecture — was slowing the replacement of Arm designs.

“As part of escalating US export controls, we must prepare for the worst,” the official added.

The government-backed consortium – known as the Beijing Open Source Chip Research Institute – has developed ‘Xiangshan’, a high-performance Risc-V computer processing chip aimed at matching Arm’s intellectual property and boosting the development of a Chinese chip design market.

The idea behind Risc-V was sparked by other open standards and software that revolutionized the digital world.

As open architecture began to gain traction outside of academic circles, the Risc-V Foundation moved its headquarters from the United States to Switzerland in 2019 to solidify its geopolitically neutral position in the chip ecosystem.

Prior to Beijing’s push to combine resources, Chinese tech giants Alibaba and ByteDance had already established teams using the Risc-V architecture to develop high-performance chips that power AI algorithms and data centers. data, according to five employees who spoke to the Financial Times.

“Our goal is to develop Risc-V [chips] to replace existing Arm ones in our most advanced products,” said a senior engineer at T-head, Alibaba’s chip arm.

However, an executive said that goal is still a long way off as T-head faces limited funding due to declining profits at its parent company.

ByteDance said its work was at a preliminary stage, while Alibaba said its development capacity was mainly in the Internet of Things sector.

Column chart of semiconductor IP market share for processors, in billions of dollars showing that Risc-V market share is expected to increase from 1% to 16% by 2027

Risc-V has been gaining traction in the west since 2020, when Arm’s proposed $66 billion sale to US chipmaker Nvidia sent shockwaves through the semiconductor industry and prompted many companies to start looking more seriously at alternatives to Arm. The deal then fell apart and SoftBank, owner of the chip designer, now plans to list Arm in New York next year.

Earlier this year, US chip giant Intel invested part of a $1 billion innovation fund in Risc-V and said its foundries would be able to build chips based on the three main architectures. chip designs: Arm, Intel’s X86 and Risc-V. .

Rene Haas, chief executive of Arm, acknowledged that Risc-V is a “very real threat to our business” in an interview with the FT earlier this year.

However, he said Arm has a significant advantage because it offers software alongside its designs and has a 50-minute developer community that makes it “increasingly difficult to take things away from Arm.”

Semico Research predicts that 62.4 billion Risc-V-based chips will ship by 2024.

Semico estimates that Risc-V only accounted for $80 million of the $2.2 billion total IP market for computer processing unit cores in 2020. However, it expects that figure to rise to 687 million by 2027, which will increase its global market share to 1%. at 16 percent.

“Risc-V started as a curiosity next to Arm, then it became an alternative, and now it’s a competitor,” said Richard Wawrzyniak, analyst at Semico Research.

Line chart of total forecast revenue ($ billion), Risc-V Artificial Intelligence Systems on Chip, by application showing Risc-V forecasts rapid growth in AI

In another sign of growing interest, Apple has moved some of its built-in cores, which power technologies like WiFi, Bluetooth and touchpad control, from Arm processors to Risc-V, according to two people briefed on its planes. Apple has also posted a number of job postings in recent months seeking engineers familiar with Risc-V.

Companies interested in developing Risc-V designs have two options: build an in-house team using the open source architecture or license from one of the companies that sell chip designs using Risc-V. These include SiFive in the United States, Codasip in Europe, and Andes Technology in Taiwan. T-head, Xiangshan and ByteDance are all developing Risc-V chips in-house.

So far, Risc-V has mainly been adopted for performing relatively simple tasks, in parts of a device that are hidden from view, also known as “embedded” processes, as well as for IoT applications.

But it has also recently begun to gain traction in a few markets for chips that improve a device’s performance or can enable “intelligence,” including data center server processors and artificial intelligence chips. .

“Risc-V has no limits. Whatever preconceived ideas you have. . . are false. He’s going to be everywhere, do everything,” SiFive co-founder Krste Asanović said in September.

Ron Black, managing director of Codasip, said his company had raised funds to design high-end processors “because a lot of our customers tell us we need to have an alternative to Arm.”

Intel said Risc-V “has traction in embedded markets and is expected to make inroads in IoT, automotive, mobile, and data center markets over the next 3-5 years. “.

The US chipmaker added that the open source architecture “is still in its infancy and needs ecosystem support to further innovate and drive market adoption.”

However, several of Arm’s biggest customers are still unconvinced of Risc-V’s potential.

Cristiano Amon, chief executive of Qualcomm, told the FT this year that the company started working on Risc-V designs for its low-power embedded processors as a “defensive move”, but said the open architecture doesn’t was not yet sophisticated enough to be used. for performance functions.

In China, the incentives to use Risc-V are stronger.

“You don’t know when the next round of US restrictions will arrive. . . using Arm’s architecture is too risky now, it’s like exposing your greatest weakness to the enemy,” said a Tencent engineer working for the Xiangshan project.

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