15 Aug 2023 -

‘Let’s work together’ to build up Chinese domestic semi industry

Taiyuan Shanxi China

Chinese semiconductor industry executives have called for building up the domestic supply chain as U.S.-led export controls limit China’s access to advanced technology.

Zhao Jinrong, chairman of state-owned chip equipment maker Naura Technology Group, told a recent conference, reported by Nikkei Asia, “To everyone across the country in the semiconductor industry, let’s work together to overcome the difficulties.”

Jacky Lin, CEO of wafer transport equipment maker Honghu (Suzhou) Semiconductor Technology, said the industry must replace foreign products with Chinese ones. Lin said the company planned to double research and development spending every year.

Roughly 400 companies participated in the Wuxi conference, which one investment fund executive said had become “a venue for corporate leaders to voice their determination to resist efforts to contain China.”

In some ways, the Chinese semiconductor industry’s pursuit of self-sufficiency is bearing fruit. Semiconductor Manufacturing International Corp. (SMIC), China’s largest chip foundry, reportedly plans to work with Huawei Technologies to supply the telecommunications equipment giant with 5G chips. For that partnership, SMIC is expected to use less advanced production equipment that falls outside of export controls imposed by the U.S. and other countries.

The output yield of such machinery is considered to be on the low end, so SMIC is expected to seek ways to improve productivity.

Chinese players are also chasing improvements in photolithography, which traces circuit patterns for chips. Government-run Shanghai Micro Electronics Equipment will start delivering equipment capable of 28-nanometer chipmaking processes, the state-owned Securities Daily newspaper reported in July. This is well behind the industry’s cutting edge of 2 to 3 nanometers.

Global demand for semiconductors has ebbed from the pandemic highs that were buoyed by sales of consumer electronics. In China, export controls have added to the pressure.

Semiconductor imports in the country by value fell 22% in the first half of 2023, while imports of production equipment also sank. At the same time, domestic output of production equipment jumped 30%, and domestic semiconductor production dipped by just 3%.

The Chinese semiconductor industry is facing a number of challenges, but it is clear that the government is committed to supporting the industry and helping it to achieve self-sufficiency. With continued investment and innovation, the Chinese semiconductor industry is well-positioned to play a major role in the global semiconductor market in the years to come.thumb_upthumb_downtuneshareGoogle it

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