Depth｜From chip to software, is computer localization ready?

Article|Caixin reporter Ye Zhanqi Intern reporter Liu Peilin

Lao Feng from Shenzhen, Guangdong has been building computers for more than 20 years. In August of this year, he saved the first purely domestic computer: Shanghai Zhaoxin's CPU, Hefei Changxin's memory, Wuhan Yangtze River Storage's solid-state hard drive and deepin operating system.

Lao Feng has been trading Intel chip motherboards for many years. In the global market, American companies Intel and AMD have an absolute monopoly in the computer CPU market, while Microsoft's Windows system occupies nearly 90% of the global market. Apple’s computers are firmly established in the mid-to-high-end market. Z2z

assembled the first purely domestic computer with good performance, which made Lao Feng very pleased. But if you want the market to accept such a computer, you have to wait: the domestically produced solution is small in scale, high in price, and few people know it.

But he believes that the localization of computers is a trend. Since the ZTE incident, the U.S. has repeatedly put pressure on the supply chain of Chinese IT companies to combine Huawei, Hikvision ( 002415.SZ ), Sugon ( 603019.SH ), iFLYTEK ( 002230.SZ ) and China Aerospace Science and Technology Co., Ltd. Many institutions under the Industrial Group and China Electronics Technology Group are included in the list of entities under export control. China’s search for alternatives is more urgent than ever.

"To build a digital world, but the'heart' is given by others, do you think it is safe?" An IT company executive of a Chinese electronic information industry group system said to Caixin reporter that the entity list is still expanding. Being on the list is bound to affect the supply chain, and many external purchases have to be terminated.

In this situation, the country has begun to promote innovation in the application of information technology, which is expected to drive hundreds of billions of dollars a year in the market, including computers, servers and cloud services, and the largest is computers.

There are millions of computers every year. According to the estimates of complete machine manufacturers, when Huawei is already out of stock, the actual shipments of domestically-made CPU computers this year will be about 2 million; Cinda Securities’ recent research report also stated that the government’s Cinco market will be launched this year. The first batch of bidding will be completed before November, and the total number of domestic desktop computers is expected to be about 6 million units in two years.

Pressure and opportunities coexist, and Chinese IT companies are gearing up to start their own national industrialization exploration. Huawei is the most important force among them. In May 2019, after the United States included Huawei in the list of entities, Huawei decided to open up its self-developed Arm-based Kunpeng CPU hardware, looking for partners to enter the computer and server market.

Hou Jinlong, senior vice president of Huawei and president of Cloud and Computing BG, first thought of Digital China ( 000034.SZ ), China’s largest IT channel provider. At the end of September this year, China Xinchuang Group, a subsidiary of Digital China, released several computer desktops and servers based on Huawei Kunpeng chips at the Huawei Full Connect Conference, and announced that its first private-brand computer and server production base was completed in Xiamen, Fujian. Put into production, with an estimated annual output of 400,000 to 600,000 units.

Huawei and Digital China have encountered good market opportunities. The global computer market just ended its seven consecutive years of contraction in 2019, rebounding 4.8% to 270 million units. Reports from IT consulting organizations Gartner and IDC both show that global computer shipments continue to grow after the first quarter of 2020. In the third quarter, the two institutions respectively gave year-on-year growth figures of 3.6% and 14.6%.

"Under the new multi-computing architecture, the global IT industry is entering a new growth cycle." Vice President of Digital China Group and China Xinchuang Group Han Zhimin told Caixin reporters that the x86 architecture camp led by Intel is fighting very fiercely. Even Huawei has done a lot of work. If Digital China enters, it will be too difficult to catch up with existing players.

However, the chip architecture of the British company Arm gave domestic computers opportunities. The United States has taken the lead in replacing it. On November 11, Apple released the Arm-based chip M1 to get rid of 15 years of dependence on Intel on Mac computers, and unified the underlying hardware of iPhone and Mac, making it the first time to be directly used on Mac App for iPhone and iPad.

In China, Han Zhimin believes that Digital China has the opportunity to take advantage of technological and ecological upgrades to change lanes and overtake. He hopes that the localized computing power will account for more than half of the entire market in the future.

China is not just the new Huawei. Tianjin Feiteng, Shanghai Zhaoxin, Loongson Zhongke and Tianjin Haiguang, etc.The domestic CPU teams are all running on different paths.

But even if it is as powerful as Apple, with such capital, supply chain, channels, brand, especially the system and software ecology, it has just begun to use Arm processors on computers. It is not easy to rebuild the computer ecology with domestic CPUs.

"The country and enterprises have invested so much money to develop chips, but they are still behind others for many years. Consumers are unwilling to accept them, so who will use it first?" A computer industry person who has worked at Lenovo for more than ten years said, It is the government that goes first and uses orders to support continued research and development and ecological construction. But even in the domestic chip industry, it is believed that only focusing on domestic replacement will not last long, and domestic CPUs must be commercially viable.

"To be honest, it is really painful to use, and the cost of system adaptation is high, but independent industries must insist." An official in charge of government informatization in Tianjin told Caixin reporter that the front-end computer is only preliminary. From switches, servers, to cloud services, big data platforms and databases, the more difficult it is to replace the lower, the more difficult it is to replace. Although these two years will be the explosive period of the Xinchuang industry, building a deep-level security system requires long-term efforts...