China to invest heavily in semiconductor development
August 28, 2018 Category China News Round-up, Weekly
China must invest heavily to develop its own advanced chips to close the gap with the United States, after the forced shutdown of ZTE Corp earlier this year exposed the country’s weakness in a core technology, according to Ding Wenwu, President of the National Integrated Circuit Industry Investment Fund, also known as the Big Fund. “Everyone is aware that the global situation is complicated, we must face the situation squarely,” he said in a speech at the Smart Expo conference in Chongqing. “The incident in the first half has made the average man-in-the-street understand about chips. Previously, people only knew about mobile handsets.”
Ding’s remarks followed a statement made by President Xi Jinping to the same conference, where he broadly reiterated China’s efforts to keep pace and collaborate with information technology initiatives around the world. “China pays serious attention to innovative development,” said Xi in the statement read at the event by Vice Premier Han Zheng. “The country will speed up the development of both its digital industry and the digitalization of industries. China wants to actively participate and cooperate in global digital developments.” Developing a strong domestic semi-conductor supply chain would enable the country to become more competitive with chip industry leader the U.S.
Semiconductors are at the center of a technology gap that China wants to close. No mainland Chinese semiconductor company has so far been able to crack the world’s top 20 ranking in terms of chip sales, which is dominated by companies from the U.S., Japan, South Korea and western Europe. Three Taiwanese firms – Taiwan Semiconductor Manufacturing Co, MediaTek and United Microelectronics Corp – were among those in the top 20, according to data from IC Insights. The Big Fund was set up in 2014 by China’s central government to lead the national effort to catch up in the global semiconductor industry by raising funds and backing semiconductor start-ups and research and development (R&D) to help China become self-sufficient in chips. China makes more than 90% of the world’s smartphones, 65% of personal computers and 67% of smart televisions, according to Bernstein Research, but it has had to buy much of the chips that go into these devices from abroad. Annual chip imports by China have risen to more than USD200 billion since 2013 and reached USD260 billion last year, the South China Morning Post reports.
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