Close Menu
TechCentralTechCentral

    Subscribe to the newsletter

    Get the best South African technology news and analysis delivered to your e-mail inbox every morning.

    Facebook X (Twitter) YouTube LinkedIn
    WhatsApp Facebook X (Twitter) LinkedIn YouTube
    TechCentralTechCentral
    • News

      Public money, private plans: MPs demand Post Office transparency

      13 June 2025

      Coal to cash: South Africa gets major boost for energy shift

      13 June 2025

      China is behind in AI chips – but for how much longer?

      13 June 2025

      Singapore soared – why can’t we? Lessons South Africa refuses to learn

      13 June 2025

      10 red flags for Apple investors

      13 June 2025
    • World

      Yahoo tries to make its mail service relevant again

      13 June 2025

      Qualcomm shows off new chip for AI smart glasses

      11 June 2025

      Trump tariffs to dim 2025 smartphone shipments

      4 June 2025

      Shrimp Jesus and the AI ad invasion

      4 June 2025

      Apple slams EU rules as ‘flawed and costly’ in major legal pushback

      2 June 2025
    • In-depth

      Grok promised bias-free chat. Then came the edits

      2 June 2025

      Digital fortress: We go inside JB5, Teraco’s giant new AI-ready data centre

      30 May 2025

      Sam Altman and Jony Ive’s big bet to out-Apple Apple

      22 May 2025

      South Africa unveils big state digital reform programme

      12 May 2025

      Is this the end of Google Search as we know it?

      12 May 2025
    • TCS

      TechCentral Nexus S0E1: Starlink, BEE and a new leader at Vodacom

      8 June 2025

      TCS+ | The future of mobile money, with MTN’s Kagiso Mothibi

      6 June 2025

      TCS+ | AI is more than hype: Workday execs unpack real human impact

      4 June 2025

      TCS | Sentiv, and the story behind the buyout of Altron Nexus

      3 June 2025

      TCS | Signal restored: Unpacking the Blue Label and Cell C turnaround

      28 May 2025
    • Opinion

      Beyond the box: why IT distribution depends on real partnerships

      2 June 2025

      South Africa’s next crisis? Being offline in an AI-driven world

      2 June 2025

      Digital giants boost South African news media – and get blamed for it

      29 May 2025

      Solar panic? The truth about SSEG, fines and municipal rules

      14 April 2025

      Data protection must be crypto industry’s top priority

      9 April 2025
    • Company Hubs
      • Africa Data Centres
      • AfriGIS
      • Altron Digital Business
      • Altron Document Solutions
      • Altron Group
      • Arctic Wolf
      • AvertITD
      • Braintree
      • CallMiner
      • CYBER1 Solutions
      • Digicloud Africa
      • Digimune
      • Domains.co.za
      • ESET
      • Euphoria Telecom
      • Incredible Business
      • iONLINE
      • Iris Network Systems
      • LSD Open
      • NEC XON
      • Network Platforms
      • Next DLP
      • Ovations
      • Paracon
      • Paratus
      • Q-KON
      • SkyWire
      • Solid8 Technologies
      • Telit Cinterion
      • Tenable
      • Vertiv
      • Videri Digital
      • Wipro
      • Workday
    • Sections
      • AI and machine learning
      • Banking
      • Broadcasting and Media
      • Cloud services
      • Contact centres and CX
      • Cryptocurrencies
      • Education and skills
      • Electronics and hardware
      • Energy and sustainability
      • Enterprise software
      • Fintech
      • Information security
      • Internet and connectivity
      • Internet of Things
      • Investment
      • IT services
      • Lifestyle
      • Motoring
      • Public sector
      • Retail and e-commerce
      • Science
      • SMEs and start-ups
      • Social media
      • Talent and leadership
      • Telecoms
    • Events
    • Advertise
    TechCentralTechCentral
    Home » World » China’s Internet giants turn to chips to lure back investors

    China’s Internet giants turn to chips to lure back investors

    By Agency Staff4 November 2021
    Twitter LinkedIn Facebook WhatsApp Email Telegram Copy Link
    News Alerts
    WhatsApp

    China’s biggest Internet companies, their shares beaten down by government regulation this year, have a new catalyst to lure buyers: semiconductors.

    Tencent Holdings, Alibaba Group and Baidu are among the consumer-orientated technology companies that have pursued chip development, in line with Chinese authorities’ ambition for the nation to be self-reliant when it comes to semiconductors.

    Just on Wednesday, Tencent shares erased losses and finished 1.1% higher after the company unveiled an artificial intelligence chip for search and recommendation, another for compressing video files and a networking chip for cloud servers. Alibaba’s stock jumped in October when the e-commerce behemoth unveiled one of the nation’s most advanced semiconductors, for use in data centres.

    The efforts show the companies are trying to appease the Chinese government

    The efforts show the companies are trying to appease the Chinese government, which wants to establish dominance in chip design and production by 2030 through state-led efforts. That should reassure investors who have been rattled by Beijing’s crackdown, in which it’s pressing companies to curb monopoly practices and thus affected their growth in consumer e-commerce.

    “It’s definitely good news for their shares,” said Steven Leung, executive director at UOB Kay Hian. “It’s an area that the government supports the most. It’s something that investors will want to hear at this moment, as they are looking for reasons to buy after such a big correction.”

    The Hang Seng Tech Index has plunged 42% from its February peak, with Alibaba, Baidu and Tencent each down 36% or more.

    Kunlun

    Baidu is a pioneer among technology giants in tapping into the semiconductor industry. Its AI chip, called Kunlun, powers the company’s in-house applications including its search engine, and the company is considering a spinoff of the AI chip unit.

    China is fighting against a global shortage of chips caused by the pandemic, as well as a US ban on the use of American technology by Chinese companies.

    The push into chip development is a “strategic move” for these Chinese tech companies to be aligned with Beijing’s policies, Nuno Fernandes, a US-based portfolio manager at GW&K Investment Management, said in an interview.

    “It shows that they are compliant with most of the requests from the government and willing to channel a big portion of their profits into a strategic investment like this to support the nation’s goal,” he said, adding that the chip industry is less likely to attract regulatory scrutiny.

    The chip development plans require long-term investments and should contribute little to their near-term earnings, said Castor Pang, head of research at Core Pacific-Yamaichi International Hong Kong. But still, the moves have eased some investors’ concern about the tensions between Chinese technology companies and the government, Pang said.

    “At least they have proved that they are loyal to this country and to the government. They are somehow helping Beijing to solve the problem of the chip shortage. And perhaps in return, the government may hold less high-profile regulatory meetings with them,” said Pang.  — (c) 2021 Bloomberg LP

    Now read: Tencent gets into the chip business



    Alibaba Baidu Tencent
    Subscribe to TechCentral Subscribe to TechCentral
    Share. Facebook Twitter LinkedIn WhatsApp Telegram Email Copy Link
    Previous ArticleFacebook removes Ethiopia PM’s post for inciting violence
    Next Article MTN in rude health – group service revenue jumps 19%

    Related Posts

    China is behind in AI chips – but for how much longer?

    13 June 2025

    Nvidia CEO says China is catching up fast in AI chip race

    29 May 2025

    Temu hits turbulence

    27 May 2025
    Company News

    Huawei Watch Fit 4 Series: smarter sensors, sharper design, stronger performance

    13 June 2025

    Change Logic and BankservAfrica set new benchmark with PayShap roll-out

    13 June 2025

    SAPHILA 2025 – transcending with purpose, connection and AI-powered vision

    13 June 2025
    Opinion

    Beyond the box: why IT distribution depends on real partnerships

    2 June 2025

    South Africa’s next crisis? Being offline in an AI-driven world

    2 June 2025

    Digital giants boost South African news media – and get blamed for it

    29 May 2025

    Subscribe to Updates

    Get the best South African technology news and analysis delivered to your e-mail inbox every morning.

    © 2009 - 2025 NewsCentral Media

    Type above and press Enter to search. Press Esc to cancel.