The Chinese government is reportedly planning to involve overseas chipmakers in its bid to gain manufacturing efficiency by 2025. This process will be overseen by an organization called the “cross-border semiconductor work committee” which is slated to be launched in the first half of the year. It will be under the supervision of the Ministry of Commerce and will foster collaboration between domestic and international semiconductor giants, most notably Intel, AMD, and ASML.
This move comes in the wake of a sustained trade war with the US that has severely handicapped multiple Chinese tech companies, including Huawei, and SMIC. China plans to set up development hubs in partnership with Intel and ASML, with hopes to build a semiconductor supply chain that is immune to US sanctions.
The Xi-led government has allocated an emergency fund worth more than $20 billion to boost the domestic semiconductor industry. With the $50 billion CHIPS acts slated to be passed by the US Congress in the coming months, this may not be sufficient. Subsidies and incentives for chipmakers like Intel are being offered in the dozen, with even countries like India pitching in.
At the same time, most chipmakers can’t afford to go against the wishes of the Chinese government. Mainland China accounts for a quarter of the global semiconductor demand. As per various sources, 26% of Intel’s overall revenue came from China.
Source: Nikkei Asia
