Chinese Chip Makers May Need 20 Years to Catch Intel

In an apparent concession to the might of Intel’s domestic engineering and chip fabrication abilities, the lead architect of China’s home-grown Loongson (aka Godson) CPU told the the People’s Daily Online that it will be twenty years before China is able to sell its chips to the U.S. “just like we are selling clothes and shoes.”

Thus far, the Loongson chip has made an appearance only in low-powered netbooks and set-top boxes, but as early as this summer the third generation of the processor is to debut in a petaflop-scale supercomputer. Because the chip has the ability to emulate x86 code (its native instruction set is MIPS-based, which hasn’t been used for desktop computers or even supercomputers for years), there has long been speculation that the processor might eventually replace x86 chips, at least domestically.

Even the process of implementing the chip domestically, cautions Weiwu Hu, head of the Loongson design team, will take at least ten years. “It still needs another decade before China-made chips meet the needs of the domestic market,” he told the People’s Daily.

The Loongson chip will compete domestically with Intel and AMD chips primarily on price: absent the IP costs of American-made chips (the Loongson is designed by what is in essence an arm of the Chinese government), and perhaps produced nearby in fabs in Taiwan, the Loongson has the potential to be significantly cheaper than comparable chips from overseas.

Given the rate of innovation in chip design and manufacture, it remains to be seen whether, 20 years from now, China’s home-grown CPU really can compete with processors designed by for-profit companies in the U.S. Unlike other areas in which China has a distinct advantage, for example materials and manufacturing, which benefit from China’s low labor costs, chip fabs have cost structures that seem to depend primarily on the level of technical sophistication.

But as Hu has said in previous interviews, this is exactly the point: for China’s growth to continue at anything close to its current rate, the society must transition to an information-based economy. Handily, China already graduates half a million engineers a year.

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