Intel opens chip innovation hub in Nanshan, China

Interesting move against backdrop of US sanctions

Intel has opened an innovation hub in China to help local technology startups, despite the Biden administration's crackdown intended to prevent China from developing advanced technologies.

Intel confirmed to The Register in a statement this morning that the unit was opened at the weekend in the city of Shenzhen in southern China, and is intended to focus on artificial intelligence (AI), chip development and edge computing, among other technologies.

The center would use "Intel's existing technologies and products to continuously enable the application innovations of our partners and customers with an open ecosystem, with a focus on applications in artificial intelligence (AI), chip applications and edge computing etc to address the local market demand."

The South China Morning Post said the district government was aiming to use the partnership to grow the Intel Greater Bay Area Innovation Center into a global "innovation highland." Local news site Now Shenzhen, meanwhile, reported that about 60 Intel partners were at the opening ceremony of the Innovation Center, and described it as an innovation exchange platform jointly built by the Nanshan District government and Intel, and operated and managed by a company called Shenzhen Extreme Vision Technology.

The senior vice president and chair of Intel China, Dr Rui Wang, is reported to have stated at the opening that the new center would "work together with partners to promote more application innovations that meet local needs, and help promote the integrated development of emerging industries in the Greater Bay Area and across the country."

The move by Intel seems extraordinary in light of Washington’s increasingly strict export controls on semiconductor technology to China, and especially technology for AI, which the Biden administration has said it fears may be used by the Chinese military.

Just a few weeks ago, for example, The Register reported that a US congressional panel was investigating four venture capital firms, including the investment arm of chipmaker Qualcomm, over the financing of Chinese AI, semiconductor and quantum technologies.

"These transactions not only help finance the development of technology that is directly contrary to US national interests, but also risk transferring critical know-how and expertise from the US to the PRC," said the panel said at the time.

And just last week, US lawmakers sitting on a Select Committee on the Chinese Communist Party argued that current trade restrictions were insufficient to prevent "clever engineering" to circumvent regulations, and called for even tighter controls.

But Intel is one of the Silicon Valley companies that are concerned by the effect that trade restrictions may have on their profits, and CEO Pat Gelsinger was in Washington to discuss the matter with officials last month, following his return from a trip to China where he is said to have visited the company's chip packaging and test plant in Chengdu, among other sites.

Meanwhile, the US and its European allies are now said to be concerned about China's moves to step up production of semiconductors manufactured using more mature process nodes.

According to Bloomberg, the concern is that China may be trying to dominate the market for everyday semiconductors made using 28nm process technology or even older, driving rival producers from other nations out of business by flooding the market with cheap chips. In this way, it could foster dependencies on China-based supply chains that it may then seek to exploit.

While the EU and US both have initiatives to boost domestic semiconductor manufacturing to reduce reliance on Asian suppliers, companies here may be reluctant to invest in facilities if they have to compete against heavily subsidized Chinese factories.

However, Bloomberg cites anonymous sources said to be familiar with the matter, and reports that spokespeople from US National Security Council and the European Commission declined to comment. ®

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