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Lagging but motivated: The state of China’s semiconductor industry


ItemDate=2021-04-05 09:32:05 Status=publish

TopicTaglist=['H3', 'V10']

#News(IoTStack) [ via IoTGroup ] #report :
Every year China imports more than $300 billion of semiconductors and most though not all major American semiconductor companies pull in at least 25% of their sales from the Chinese market. Despite the harsh rhetoric on both sides of the Pacific American semiconductor companies and their Chinese counterparts today are working together on hundreds if not thousands of product designs and joint technology development efforts. As U.S. officials weigh their policy options in that regard they first need to level-set on the state of the Chinese and global semiconductor industries and how Beijing has approached its goal of building a domestic chip-making industry. Despite these investments Chinese semiconductor companies make up a relatively small part of the global market. Despite this effort to build up the Chinese semiconductor industry the regional structure of the industry—based on the global distribution of market share using company headquarters location—was essentially unchanged in 2020 compared to 2014 and there has been no major shift to China in that time period. These segments are more natural fits for China’s competitive advantages: Back-end manufacturing is a less technically challenging process that depends on low labor costs and operational efficiency; fabless design companies benefit from closeness to end customer applications (of which Chinese OEMs develop many) and have low barriers to entry due to widely available off-the-shelf design tools. As in the phone and PC industries Chinese semiconductor companies would be better off focused on winning customers rather than winning government support and by partnering with foreign firms to co-develop technology build ecosystems and pursue global customers. Along with their counterparts in Congress the Biden administration will need to carefully weigh the benefits that come from U.S. semiconductor companies competing in one of the world’s largest markets against the risk of American-sourced technology being used
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