Due to the sanctions China has doubled the level of

Due to the sanctions, China has doubled the level of localization in chip production facilities

As part of the measures taken by the US to slow down China’s technological progress in the semiconductor sector, China was able to double the localization level of chip production facilities within two years, reaching over 40%. This progress underscores the country’s commitment to self-sufficiency in this important technology area, despite external constraints.

    Image source: GDJ/Pixabay

Image source: GDJ/Pixabay

China has seen a significant increase in localization rates in semiconductor manufacturing equipment, particularly in physical vapor deposition (PVD) and oxidation equipment, where the rate is above 50%.

According to semiconductor industry association SEMI, the localization rate of semiconductor equipment in China was only 21% in the past. However, thanks to targeted measures and investments in research and development (R&D), this figure has increased to 35% by 2022.

A study conducted by DIGITIMES Asia found that in all parts of the value chain of China’s semiconductor industry – including device manufacturing, chip lithography manufacturing, packaging and assembly processes, testing and integrated design and manufacturing (IDM) – semiconductor equipment manufacturers are leading the way at the highest level Level. Investments in research and development.

Over the past two and a half years, the average size of such investments by Chinese companies in this sector exceeded 10% of sales, surpassing even China’s largest chipmaker Semiconductor Manufacturing International Corp (SMIC) and significantly surpassing semiconductor contract assembly and testing (OSAT). ) companies.

Advanced Micro-Fabrication Equipment Inc China (AMEC) has invested an average of more than 13% of its revenue in research and development over the past two and a half years. During the same period, Naura Technology invested 11% of its sales in research and development. In turn, companies engaged in the development of integrated circuits have even higher investments in research and development compared to chip equipment manufacturers and chip manufacturers themselves, due to the specifics of this industry.

According to an analysis report published by State Street Global Advisors titled “Semiconductor localization: China is making progress“China’s self-sufficiency in semiconductors is due to China’s large domestic market, strong government support, strong research and development capacity and capital market support.”

About the author

Dylan Harris

Dylan Harris is fascinated by tests and reviews of computer hardware.

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