Chinese factories to produce record number of semiconductors in 2021

Written by Guillaume
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This article is an automatic translation

This is an attempt to reduce the Chinese electronics industry's dependence on imports from South Korea and Taiwan.

The news made a lot of noise, widely reported by all the media outlets in the Middle Kingdom: in May 2021, the various Chinese industrial companies produced a whopping 29.9 billion components, an increase of 37.6% over one year. Last April, production was 28.7 billion chips, and in March it was 29.1 billion. In total, since the beginning of the year, China has produced 139.9 billion integrated circuits, an increase of 48.3% compared to the first five months of 2020, according to the South China Morning Post, which quotes the National Bureau of Statistics.

SMIC factory, the largest semiconductor manufacturer in China

However, the situation is not trivial or trivial at all. China is one of the world's largest producers of semiconductors, but it is also the largest consumer by far. In fact, China's domestic production alone is not enough for the national industry: only 15.9% of the components used by its factories are manufactured on Chinese soil... all the rest is imported from countries with which China is not necessarily on good terms on a more political level, South Korea and Taiwan. Even more embarrassing, China still designs very few components and only 6% of the chips used by the Chinese industry are designed on the national territory. Finally, despite the efforts made, the situation is only getting worse, as in the first five months of 2021, China has already imported 260.35 billion printed circuits, which represents a 30% increase in imports compared to the first five months of 2020.

In an attempt to remedy the situation, Beijing has invested considerable sums in its production facilities. In fact, over the whole of 2020, the country is even number one in these investments if we are to believeUsine Nouvelle: while the financial effort of the global semiconductor industry has increased by 19% to a record of 71.2 billion dollars, that of China has jumped by 39% to 18.72 billion dollars. The Middle Kingdom is thus ahead of the competing nations mentioned above for the first time: Taiwan is second with 17.15 billion dollars of investment in 2020, while South Korea completes the podium with 16.08 billion dollars. However, this battle remains confined to the Asian Far East, and Europe seems far removed from these concerns.