Jack Ma Says Nations Need Tech to Sidestep U.S. Grip

(Bloomberg) -- Alibaba co-founder Jack Ma argues that nations from Japan to China need to develop their own semiconductor technology to get around America’s grip on the global chip market.

The billionaire executive chairman of Alibaba Group Holding Ltd., explaining the e-commerce titan’s growing interest in chips including this month’s acquisition of local design-house Hangzhou C-Sky Microsystems Co., said he’s motivated in part by a desire to make chips “inclusive:” cheap, efficient and available to all. He said his company has invested in five semiconductor firms in the past four years.

“America was the early mover and China, we need a lot of things. 100 percent of the market for chips is controlled by Americans,” he told students and entrepreneurs at Tokyo’s Waseda University. “And suddenly if they stop selling -- what that means, you understand. And that’s why China, Japan, and any country, you need core technologies.”

Ma’s comments dovetail with the views of Chinese business chieftains and politicos alike. Ma joins industry peers such as Tencent Holdings Ltd. founder Pony Ma in espousing a world-class domestic chip industry as tensions simmer with the U.S., the global leader in cutting-edge semiconductor technology.

Semiconductors lie at the heart of a spat between the world’s two largest economies, a dispute that’s swelling tariffs, chilling Chinese investments in American companies and hampering the Asian nation’s development of technologies from fifth-generation wireless to artificial intelligence. The U.S. government is even reviewing the possible use of a 1977 law under which President Donald Trump could declare a national emergency, block transactions and seize assets.

Along with the U.S. blacklisting of ZTE Corp. for seven years, that only reminded Beijing of the urgent need to whittle down its dependency on American technologies. The action taken against ZTE has ironically galvanized China’s existing plan to shell out some $150 billion over 10 years to achieve a leading position in chip design and manufacturing -- a vision that U.S. executives and officials have repeatedly warned could harm American interests.

“We’re entering a world where people don’t trust each other. That’s why we have trade wars and so many problems,” Ma said. “But don’t give up. Trust isn’t just gained, it’s about building. And we can build.”

--With assistance from Lulu Yilun Chen

To contact the reporters on this story: Yuji Nakamura in Tokyo at ynakamura56@bloomberg.net, Yuki Furukawa in Tokyo at yfurukawa13@bloomberg.net.

To contact the editors responsible for this story: Robert Fenner at rfenner@bloomberg.net, Edwin Chan, Reed Stevenson

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