The hackneyed thesis that crisis creates opportunity is once again illustrated by the example of the Chinese processor developer Phytium, which, against the backdrop of American sanctions, was able to supply more than 10 million of its Feiteng series processors to the Chinese domestic market. These processors in China are used both in cloud infrastructure and as part of end user devices.
Image source: Phytium
Phytium itself also has to operate under sanctions, but that didn’t stop the company from introducing the 64-core Feiteng Tengyun S2500 server processor and FTC870 core last year, which rivals the Arm Neoverse N2. For office systems, the Feiteng Tengrui D3000 desktop processor was introduced. Phytium’s example is not unique, as other Chinese processor developers are benefiting from US sanctions in the sense that demand for their products is growing. Loongson not only supplied 10,000 of its processors to Chinese schools, but also launched one of them into Earth orbit.
Import substitution in China demonstrates effectiveness due to the large capacity of the domestic market. This is noticeable at least from the dynamics of development of the local electric vehicle market. If Chinese government agencies and the private sector switch to using Chinese-designed processors, the corresponding chips will evolve faster as developers have more money to spend on development. The United States is still demonstrating a course towards further tightening sanctions against China, so this country has to rely primarily on its own resources in the development of the semiconductor industry.