China lags far behind in semiconductor battle

It could take China over 10 years to become relevant in industry: Tsinghua Unigroup chairman

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TAIPEI (Taiwan News) — China is lagging behind in its quest to become a global leader in the semiconductor industry, said Chairman Zhao Weiguo (趙偉國) of China’s state-run semiconductor maker Tsinghua Unigroup.

China is faced with underinvestment problems as it seeks to develop its chip-making industry, Zhao said in a conference on Friday (Nov. 8). This is despite government-spearheaded initiatives to drive up demand and pursue advanced technologies, reported UDN.

According to Zhao, Samsung spends at least US$20 billion in research and development as well as capital expenditure each year, while Intel and Taiwan Semiconductor Manufacturing Company (TSMC) each invest more than US$10 billion annually. By comparison, China’s National Integrated Circuit Industry Investment Fund has only funneled 130 billion yuan (US$18.6 billion) into these areas over a span of five years.

Rebutting talk of an “overheated” semiconductor sector in China, Zhao reckoned that the country’s chip-making companies are concentrated mostly in the “lower tier” of the supply chain. For example, China has a staggering 3,000 firms dedicated simply to the design of chips.

“There’s no need for the United States to feel jittery,” Zhao joked, adding, “We’re trailing far behind, not posing any threat to the U.S. in the competition.” He estimated that it will take at least another decade for China to become relevant in the industry.

As semiconductors remain a core issue in the protracted U.S.-China trade war, Zhao on Friday also urged American companies to make efforts to help defuse tech tensions between the world’s two largest economies since they continue to reap profits from the Chinese market, reported Reuters.