China recruits Alibaba and Tencent in fight against US chip sanctions

China has tapped tech giants Alibaba and Tencent to help its efforts to design semiconductor chips as Beijing prepares for further US-led 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 rights for the chip. Beijing wants to reduce its reliance on SoftBank-owned Arm, whose technology underpins the majority of semiconductors around 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 emerged as a competitor to Arm in recent years.

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

Beijing’s interest in Risc-V has grown as Washington has increased pressure on China’s technology sector by restricting access to cutting-edge chip components and machinery.

The US has lobbied allies, including the Netherlands and Japan, to cut Chinese tech companies out of their supply chains, as it did with Huawei in 2019. This has prompted China to prepare for further disruption of 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 against Beijing because it supplies its designs to Chinese technology companies.

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

“Under escalating US export controls, we need to 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 computing chip that aims to match Arms’ IP and boost the development of a Chinese chip design market.

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

As open architecture began to gain traction outside academia, the Risc-V Foundation moved its headquarters from the US to Switzerland in 2019 to strengthen its geopolitically neutral position in the chip ecosystem.

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

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

However, one executive said that goal was still years away from being realized as T-head struggles with limited funding due to declining profits at its parent company.

ByteDance said its work was at an initial stage, while Alibaba said its development capabilities were mainly in the Internet of Things sector.

CPU Semiconductor IP Market Share Bar Chart, $ (billion) shows Risc-V market share expected to grow from 1% to 16% by 2027

Risc-V has been gaining traction in the West since 2020, when the proposed $66 billion sale of Arm to US chipmaker Nvidia sent shockwaves through the semiconductor industry and pushed more companies to start looking more seriously at alternatives to Arm. The deal later collapsed and SoftBank, which owns the chip designer, now plans to list Arm in New York next year.

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

Rene Haas, Arm’s chief executive, 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 community of 50 million developers that makes it “increasingly difficult to move things away from Arm”.

Semico Research predicts that 62.4 billion chips based on Risc-V will be shipped in 2024.

Semico estimates that Risc-V only accounted for 80 million. USD of the total IP market of 2.2 billion. USD for computing device cores in 2020. However, it expects this to grow to 687 million. USD in 2027 – which takes its share of the global market from 1 per cent. to 16 per cent

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

Line chart of total forecast revenue $ (billion), Risc-V artificial intelligence systems on a chip, by application, showing Risc-V forecast to grow rapidly in AI

In a further sign of growing interest, Apple has moved some of its embedded cores, which power technologies such as WiFi, Bluetooth and touchpad control, from Arm processors to Risc-V, according to two people briefed on its plans. Apple has also posted a number of job ads in recent months looking for engineers familiar with Risc-V.

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

So far, Risc-V has been predominantly used to perform tasks that are relatively simple 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 boundaries. Whatever preconceptions you have . . . are wrong. It’s going to be everywhere and do everything,” SiFive co-founder Krste Asanović said in September.

Ron Black, CEO of Codasip, said his company has raised money to design advanced processors “because a lot of our customers are telling us we need an alternative to Arm”.

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

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

However, several of Arm’s biggest customers are not yet convinced of Risc-V’s potential.

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

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

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

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