Tencent to support the Chinese chip industry
Tencent has evolved into one of the biggest gaming companies in the world, as it owns 40% of Epic’s shares and has recently bought 80% of Grinding Gear Games, the company responsible for the acclaimed Path of Exile ARPG. The Chinese company is also an important player in the social media market, developing the popular WeChat messaging app. With the recent ZTE debacle, Tencent clearly expressed its position against the heavy reliance on foreign suppliers, into which the Chinese semiconductor and chip makers are still forced. Additionally, Tencent is determined to support the Chinese chip makers to break away from the foreign supply dependency.
According to Reuters, Tencent CEO Ma Huateng stated that the company is not yet ready to get involved in the chip-making process itself, but it would help the Chinese chip makers with relevant date collected via the WeChat platform. Furthermore, Tencent will encourage all WeChat developers to use Chinese hardware for all the software development work. “It would probably be better if we could get in to support semiconductor R&D, but that is perhaps admittedly not our strong suit and may need the help of others in the supply chain,” Ma said.
ZTE is still in danger of going out of business, as the company imported most of the components it needed for its smartphones from U.S soil. Even though Samsung offered to help ZTE and the Trump administration may show mercy, these attempts would still count as foreign import and may only act as a temporary solution. The Chinese government is currently looking into ways to augment the country’s chip-making capacities, and one solution would be to incentivize foreign investors to heavily invest in Chinese chip funds, but this is bound to take some time, so the reliance on foreign imports could still last for a few years.