This development coincides with a US investigation into China's alleged unfair competitive practices aimed at achieving self-sufficiency in chip production. Beijing supports its domestic chip industry with substantial state funds, including a $47 billion fund established in May.
Foreign companies in the automotive sector, with annual revenues exceeding $80 billion, face a choice: produce more in China or lose market share. Many are opting for the former, leading to shifts in the global chip supply chain.
Although China currently produces mainly simple chips for basic vehicle functions, recent advances show that the country could become a serious competitor in the future. China's dominance in the production of EVs, which require a large number of chips, reinforces this trend.
As Chinese chipmakers make progress, competition for Western companies both inside and outside China is intensifying. For example, Beijing-based Horizon Robotics, a rival of Nvidia and Qualcomm in the field of automotive technology, has seen its number of customers grow from 14 in 2021 to 25 in June 2024.
These shifts underscore China's determination to achieve technological independence and pose a challenge for international chip producers operating in the Chinese market.