After several decades and billions of dollars of investment, only 16 per cent of semiconductors used in China today are manufactured domestically.

China has to strike a balance between the heavy investment that the industry requires and the returns that such spending may, or may not, yield.

by
Zen Soo, Li Tao, Chua Kong Ho

Semiconductors have become the cornerstone technology of the information age and Taiwan has managed to carve out a leading industry position.

Some in China see custom AI chips, which can offer superior performance to conventional integrated circuits even when manufactured using older processes, as helping the country loosen its dependence on the US in core technology.

China has made self-reliance in core technologies a key initiative, but the country remains at least one to two generations behind the US in the critical field of semiconductors, according to industry veteran.

President Xi Jinping has called for greater self-sufficiency in strategic industries, such as semiconductors, as China’s trade war with the US escalates.

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While China is on a par with global peers in chip design, there is a 10-year gap in terms of the foundry business, says former Intel China MD.

Vice-president of the Semiconductor Industry Association, a US trade group that represents some of the world’s biggest chip makers, speaks about China’s chip efforts.

EDA software has become more important for the semiconductor industry over the years, as designers deal with the complexity of having billions of transistors on smaller chips.

Senior industry executives call on governments around the world to resist decoupling supply chains and disentangling economic cooperation.