China's semiconductor industry has faced technical bottlenecks for a long time, especially in high-end chip manufacturing field. The global advanced technology nodes have reached 5nm or even 3nm, while most of China still stays at 14nm and above. This means that there is a clear gap between domestic chips and international leading products in terms of power consumption, performance and cost.
China's semiconductor industry is highly dependent on foreign supply chains. Many key materials and equipment need to be imported, which makes them in a weak position in the supply chain. At the same time, the shortage of talents is also a key factor. Although China has abundant talents in the field of semiconductor design, there is a serious shortage of talents in key fields such as high-end manufacturing and process research and development, especially in technologies below 7nm.
However, both the government and enterprises see the importance of this issue. A series of policies have been introduced to provide funds and tax incentives to support industrial development. Enterprises also began to actively cooperate with foreign enterprises, introduce advanced technology and increase investment in independent research and development. With the continuous growth of China's market and the accumulation of technology and talents, the development momentum of semiconductor industry has gradually strengthened.
Although there are still many problems in China's semiconductor industry, with the strong support of the state and the continuous growth of the market, it is only a matter of time before the industry rises.
Main challenges facing China's semiconductor industry
Technical Bottleneck and Core Technology Limitation
Domestic semiconductor industry has faced technical bottlenecks for a long time. In the global chip manufacturing industry, the most advanced technology nodes have reached 5nm or even 3nm, but China's technology level still stays at 14nm and above. This means that there is a clear gap between domestic chips and international leading products in terms of power consumption, performance and cost.
In addition, the lack of core technology is also an obstacle. For example, EUV (Extreme Ultraviolet Lithography) is one of the key technologies in chip manufacturing at present, but almost all the core equipment and materials of this technology are in the hands of a few companies, and the breakthroughs of Chinese enterprises in this area are still limited.
Dependence on foreign supply chains
Although China is the world's largest chip consumer market, most key materials and equipment still need to be imported. This makes China's semiconductor industry in a weak position in the supply chain. Especially in the field of high-end chip manufacturing, such as chips used in servers, artificial intelligence and 5G applications, the dependence is particularly obvious.
Shortage of talents and loss of knowledge
Talent is the key to the development an industry. China has a large number of talents in the field of semiconductor design, but there is a serious shortage of talents in the fields of high-end manufacturing, process research and development and core materials, especially in the technical nodes below 7nm. At the same time, due to the attraction of high salaries, many top talents choose to work abroad, resulting in the loss of knowledge.
Market Environment and Policy Factors
Although the Chinese government has formulated many policies to support the development of the semiconductor industry, there are still some shortcomings in some key links, such as funds, taxes and research and development subsidies. In addition, unfair competition and intellectual property protection in the domestic market environment are also one of the factors restricting industrial development.
How China Strives to Break through the Barriers of Semiconductor Development
National policy support and capital investment
The Chinese government is fully aware of the strategic significance of the semiconductor industry. Therefore, a series of policies have been introduced to promote industrial development.
Investment and subsidies: In recent years, the central and local governments have provided subsidies of hundreds of billions of yuan to semiconductor enterprises for research and development, factory construction and recruitment of talents.
R&D tax relief: For companies engaged in semiconductor research and development, the government provides tax incentives to reduce their operating costs.
Industrial fund: For example, "Big Fund" has provided financial support for a series of semiconductor projects.
Cooperation and internationalization strategy
Under the background of globalization, China is also actively seeking cooperation with foreign enterprises and research institutions.
Introduce foreign technology: Access to advanced technologies and processes through technology transfer, licensing or joint ventures.
Overseas mergers and acquisitions: Some Chinese companies are starting to make acquisitions overseas, hoping to gain technology and market share directly.
International R&D Center: Set up R&D centers overseas to attract top international talents.
Scientific Research Innovation and Technology Accumulation
For long-term backward technology, simple purchase and introduction is not a long-term solution. China is vigorously developing independent research and development.
Academic research: Encourage universities and research institutions to conduct basic research in the semiconductor field and provide financial and policy support.
Enterprise R&D: Large semiconductor companies such as HUAWEI and SMIC have invested a lot of resources in independent research and development.
Technology Park: Establish semiconductor R&D and manufacturing parks all over the country to form industrial agglomeration effect.
Cultivate local enterprises and build semiconductor ecosystem
Semiconductor industry chain is long, many links, it is difficult to complete by one enterprise alone.
Encourage innovation and entrepreneurship: Provide financial and policy support for start-ups and promote technological innovation.
Industrial synergy: Encourage deep cooperation between upstream and downstream enterprises to form a closed-loop ecological circle.
Supply chain autonomy: Encourage enterprises to find or independently produce key materials and equipment in China to reduce their dependence on the outside world.
Analyze the current development momentum and opportunities
Semiconductor industry is the core driving force of global technology development. With the rise of 5G, artificial intelligence, Internet of Things and other technologies, the demand for chips is increasing day by day.
Industrial growth rate: According to statistics, the annual growth rate of China's semiconductor market has exceeded 20%, which is obviously higher than the global average.
Market size: China is the largest electronics manufacturing center in the world, and its domestic demand for semiconductor products is huge.
Technological progress: In terms of power efficiency, performance and cost, the products independently developed by China have gradually approached the international advanced level.
The new situation of international competition and cooperation
In the global semiconductor competition pattern, China is changing from chaser to participant.
Competitive situation: In some technical fields, such as AI chips, Chinese enterprises such as Huawei and Cambrian have shown strong competitiveness.
Partner: In addition to the United States, China has strengthened cooperation with semiconductor enterprises in Europe, Japan, South Korea and other countries.
Global layout: Chinese enterprises have begun to set up R&D centers and production bases overseas to enhance their international influence.
Future Path Choice of Chinese Semiconductor
Facing the complicated international environment, China's semiconductor industry needs to make wise strategic choices.
Technology selection: Do you continue to pursue the most advanced technology nodes, or focus on specific market segments?
Market positioning: Do you focus on the domestic market or actively expand the international market?
Cooperation strategy: With which countries and enterprises to cooperate, how to protect the dual interests of technology and market?
Possibility and potential obstacles of rising
China Semiconductor Industrial rise possibility is enormous, but there are also some challenges.
Technical barrier: Breakthroughs have not yet been achieved in some key technologies and materials.
Return on investment: Semiconductor industry needs huge investment, but the return period is long and the risk is great.
External pressure: Facing the international technology blockade and trade friction, Chinese enterprises need to find a new way to survive and develop.
Why China Semiconductor Can't Develop Well and Can It Rise?-China.exportsemi.com
