China’s Chip Industry: A Beacon of Hope Amidst Geopolitical Uncertainty
As the 21st China International Semiconductor Expo kicks off in Beijing, industry experts and investors gather to discuss the impact of Taiwan Semiconductor Manufacturing Company (TSMC) cutting advanced foundry services for some mainland clients. Despite US threats of more sanctions, China’s massive market and potential in advanced semiconductors and generative artificial intelligence (AI) offer a silver lining.
A Shift in Focus
The conference, which brings together over 500 firms from China’s semiconductor supply chain, highlights the country’s determination to drive growth in the sector. Leading companies like Naura Technology Group, Yangtze Memory Technologies Corporation, ChangXin Memory Technologies, and Huawei Technologies are showcasing their latest advancements.
Geopolitical Concerns
The looming uncertainty surrounding US policies under a new Donald Trump administration has raised concerns among industry insiders. Trump’s vow to increase tariffs on China-made goods by 60% has sparked fears of supply chain disruptions.
Adapting to New Realities
He Weiwei, co-founder and general manager at BASiC Semiconductor, revealed that the company has invested an additional 20-30 million yuan (US$2.8-4.1 million) in developing manufacturing facilities and materials in mainland China. This move aims to mitigate the risk of US sanctions cutting off supplies.
Innovating Around Restrictions
Dong Longfei, co-founder of graphics processing unit (GPU) start-up Moore Threads Technology, expressed confidence that Chinese firms will find ways to advance semiconductor production. He cited chiplets, modular integrated circuits that can be packed together in chips, as a potential solution to manufacturing setbacks.
Overcoming Challenges
Moore Threads, added to a US trade blacklist in October 2023, is determined to overcome the loss of access to global foundry services using US technology. The company, founded by Zhang Jianzhong, former head of Nvidia’s China operations, aims to take on Nvidia in China.
TSMC’s Impact
TSMC’s decision to suspend foundry services for 7-nanometre feature sizes or smaller has affected Chinese AI chip designers. However, few Chinese companies have disclosed where their chips are processed, and no mainland fabs can match TSMC’s advanced nodes.
A Path Forward
Despite US efforts to decouple from China, the country’s massive market and potential in advanced semiconductors and AI offer a way forward. Industry experts believe that China will continue to attract global semiconductor companies, and collaborations with countries like South Korea hold great potential.
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