Newly semiconductor-related registered companies in China have almost tripled for the first half of 2021 compared to last year’s figures, official numbers show. The figure indicates that China is going full speed in developing its semiconductor industry, with support from government policies and the China Integrated Circuit Industry Investment Funds. Related companies increased 18,800 units in the first half of the year with a yearly increase of 171.8%.
China highly relied on chips imported from overseas in the past, but after the U.S. imposed sanctions barring Chinese tech giants such as Huawei‘s access to American processor chips, it has become China’s Achille’s heel that impedes domestic technology development.
The Chinese enterprise credit research unit, , released a 2021 enterprise development semiannual report showing that numbers of newly registered chip-related companies grew from 1,272 in the year 2011 to reach 7,715 units eight years later in 2019 in a rather smooth growth, but in 2020, the figure sky-rocketed to 22,800 units which tripled the previous year.
The report stated that China’s chip industry, which benefited from strong support by the government and fundings, has entered a “golden era” of development. In the first half of 2020, the newly registered company stood at 6,900 units. Currently, the total number of chip-related companies stands at 72,000, and are mostly clustered in Shenzhen (13,000 units), Guangzhou (6,000 units) and Shanghai (4,000 units) Cities. Guangdong Province is home to 23,000 of them, roughly hosting a third of the country’s chip companies.
Not only is the government sparing no efforts expanding the chip segments for self-sufficiency, domestic tech giants are also investing in the chip industry. Hubble Technology Investment was established by telecom giant Huawei in April 2019, up to 9 July, it has invested in 37 chip-related companies. Huawei’s strong domestic competitor Xiaomi has also invested in over 40 companies including in RFIC and MCU areas in the first quarter, which includes Dioo Microcircuits Co, MindMotion Microelectronics Co and ASR Microelectronics Co. In the second quarter, Xiaomi’s investments expanded to RISC-V-based processors and ASICs, chip firms such as Yunyinggu Technology, BYD Semiconductor Co and Brite Semiconductor are among the beneficiaries.
So far, the technology for advanced process nodes below 14nm is still dominated by TSMC, Samsung and Intel, while China’s SMIC still has a long way to go before catching up. Godfather of Taiwan’s DRAM industry, Charles Kao, who had previously served as the CEO of the Chinese Tsinghua Unigroup, that recently went bankrupt, commented that even if China is currently constrained under the U.S. sanctions, they may eventually be able to obtain technologies to make DUV machines even if EUV technology is still unattainable.
Sources: (1), (2), (1), (2)