Once touted as China’s Nvidia, Xiangdixian Computing Technology (XCT) is undergoing massive financial woes. Development of national GPU has not yet fully met the company’s expectations and is facing specific market adjustment pressures,” the company said. Nevertheless, The Register reports that the possibility of the company closing its doors is still possible.
The company already produces two desktop and one workstation GPU models, all based on its own Tianjun chip. Despite that, there have been rumors that the company has shut down, forcing it to release a statement that says otherwise. The news comes amidst a massive layoff within the company, although its core R&D and operations staff remain on board, which are crucial for GPU development.
On the other end of the spectrum, the company’s shareholders are also suing its founder, Tang Zhimin, for failing to raise the 500 million Yuan (more than $70B) in series B financing that he promised. One of the plaintiffs in the case against XCT is the state-owned fund Jiangsu Zhongde Services Trade Industry Investment Fund, which filed a lawsuit against three companies controlled by Zhimin and are also shareholders of the failing GPU company.
Another company, Capitalonline Data Service, is also reported to be suing the company for failing to pay 18.8 million Yuan (almost $2.7 million). Aside from these cases, there are reports that XCT’s bank account has been frozen, meaning it doesn’t have access to the funds it needs to continue its operations.
This impending failure of XCT is another major blow to China’s dream of a self-sufficient chip industry. Currently, the country depends on the Western world for most of its technologies, and the bans and sanctions that the U.S. is applying against Beijing to delay its advancements are taking their toll.
The East Asian country is pouring billions of dollars into its semiconductor industry, but some experts say it will take years, if not decades, to gain parity. While promising developments have been made, like Huawei’s Ascend 910C, Chinese firms focused on domestic chip production still face challenges.
Aside from the technical challenges of building a GPU, there have also been some serious allegations of corruption within the Chinese semiconductor industry. There were reports of some senior executives pocketing the proceeds from the investment with nothing to show for it in terms of technical development.
Although XCT has produced some GPUs, its products still haven’t made the inroads expected in the Chinese market, which is probably why its investors are starting to become wary. The company is currently trying hard to restructure its operations for its survival. But if it fails to receive the additional funding it needs soon, XCT will likely fold, cutting short the company’s GPU dreams.
