China gives chipmakers new powers to guide industry recovery

    WORLD  22 March 2023 - 01:00

    China is giving a handful of its most successful chip companies easier access to subsidies and more control over state-backed research, as tightening US controls on access to advanced technology force a major rethink in Beijing’s approach to supporting the sector.

    The nurturing of closer cooperation with a select group of companies comes after the government shook up its tech strategy this month with the creation of a new Communist party science commission and a reinvigorated Ministry of Science and Technology, the Financial Times reports.

    Chipmakers Semiconductor Manufacturing International (SMIC), Hua Hong Semiconductor and Huawei, as well as equipment suppliers Naura and Advanced Micro-Fabrication Equipment Inc China, will be among those benefiting from the policy shift, according to people familiar with the matter.

    The chosen few will have access to additional government funding without having to achieve performance goals that were previously necessary. They will also be able to play a bigger role in state-backed research projects, reducing the influence of state-owned companies and academic institutes.

    “The Chinese government will subsidise these companies to produce and deploy localised chipmaking tools without any funding cap, just in order to overcome US restrictions,” said one person with direct knowledge of the policy shift.

    The move is a tacit admission that previous policies of massive and often ill-targeted subsidisation of the semiconductor industry to build up domestic capabilities have been unsuccessful and are no longer an option, with China needing a different response to tough US restrictions on its industry’s development.

    “China has wasted too much money on non-functional research to bypass the sanctions without harvest,” said a government official working closely with Chinese chipmakers. “It is time to ditch the delusions and channel all possible resources into the companies, with the capability to guide the industry out of misery.”

    This liberalisation for a few comes as China is seeing its industry crippled by the Biden administration’s restrictions on the export of advanced chips, while a trilateral agreement among the US, Japan and the Netherlands is set to prevent it from acquiring the latest chipmaking equipment.

    China needed to accelerate the development of homegrown replacements, analysts said, but it would not be an easy task. “There are bound to be bouts of pain in replacing equipment with domestic alternatives, but it is unavoidable,” said Lucy Chen, vice-president of Taipei-based Isaiah Research.

    Beijing’s direct intervention with big investments has failed to produce much of a technological edge, according to industry executives. One manager at a domestic chipmaker cited as an example attempts to make lithography equipment for chipmaking, in which research has been under way since 2006.

    “Homegrown lithography was examined and verified by academics, not industrial engineers,” said the executive, who requested anonymity owing to the sensitivity of the matter. “This equipment is only theoretically usable, and no chip manufacturer has ever dared to activate such a machine in their fabs.”

    Industry experts are still cautious about how receptive the Chinese government will be to the industry’s concerns.

    “The first step may be the most difficult, which is to explain the real plight of the industry and our needs to the officials,” said an executive from a Chinese chip-tool maker. “The officials and investors only listen to the good news.”

    SMIC, Hua Hong, Huawei, Naura and Advanced Micro-Fabrication Equipment Inc China did not respond to requests for comment.

    Caliber.Az

    Subscribe to our Telegram channel


Read also

Nearly 80 schoolgirls poisoned in Afghanistan

05 June 2023 - 14:39

Arms contract shows Iran has sold Russia ammunition for Ukraine war, says security source PHOTO

05 June 2023 - 14:11

No survivors after plane crashes in US state of Virginia after reported sonic boom

05 June 2023 - 14:46

US, UK navies say responded to call from ship in Strait of Hormuz

05 June 2023 - 13:15

Why IAEA closed its probes in Iran Opinion by Ynet News

05 June 2023 - 11:48

Shavkat Mirziyoyev registered as presidential candidate

05 June 2023 - 14:53
ADVERTS
ВИДЕО
Latest news

    Shavkat Mirziyoyev registered as presidential candidate

    05 June 2023 - 14:53

    No survivors after plane crashes in US state of Virginia after reported sonic boom

    05 June 2023 - 14:46

    Nearly 80 schoolgirls poisoned in Afghanistan

    05 June 2023 - 14:39

    Azerbaijani army holds training-methodical sessions with artillery chiefs

    VIDEO

    05 June 2023 - 14:32

    FM: Armenia has no mandate to negotiate on Karabakh's status

    05 June 2023 - 14:25

    Turkish lira slips despite appointment of well-regarded finance minister

    05 June 2023 - 14:18

    Arms contract shows Iran has sold Russia ammunition for Ukraine war, says security source

    PHOTO

    05 June 2023 - 14:11

    Kyiv updates latest Russian army losses

    05 June 2023 - 14:03

    NATO chief thanks Türkiye for sending reinforcements to Kosovo amid unrest

    05 June 2023 - 13:49

    EU urges Serbs to return to Kosovo power structures

    05 June 2023 - 13:42

    Top diplomat: Armenia's detention of Azerbaijani servicemen blow to confidence building

    05 June 2023 - 13:36

    Saudi Arabia cuts oil output to boost prices

    05 June 2023 - 13:29

    Can Chinese yuan be full-scale reserve currency?

    BRICS members face a dilemma

    05 June 2023 - 13:22

    US, UK navies say responded to call from ship in Strait of Hormuz

    05 June 2023 - 13:15

    FM: Azerbaijan receives appeals from Iran over embassy's reopening

    05 June 2023 - 13:08

    MP: Azerbaijan's economy more than tripled over past 20 years

    05 June 2023 - 13:01

    Azerbaijani FM: Armenia, its patrons do not want to accept new regional realities

    05 June 2023 - 12:44

    Israel, Russia and peace in the South Caucusus

    05 June 2023 - 12:37

    ISW: Kremlin not sure how to react to raids in Belgorod region

    05 June 2023 - 12:30

    Health of German woman jailed in Iran failing, says activist

    05 June 2023 - 12:23

    Azerbaijani Central Bank's foreign exchange reserves reach $9.2 billion

    05 June 2023 - 12:16

    Kyrgyz special services detain suspects in coup attempt

    05 June 2023 - 12:09

    UK intelligence: Russia tried in vain to get Ukraine to waste valuable missiles to neutralise UAVs

    05 June 2023 - 12:02

    Why Pashinyan opted to attend Erdogan's inauguration?

    Farhad Mammadov's viewpoint

    05 June 2023 - 11:55

    Why IAEA closed its probes in Iran

    Opinion by Ynet News

    05 June 2023 - 11:48

    Pakistani leader invites Erdogan to Strategic Cooperation Council meeting in Islamabad

    05 June 2023 - 11:41

    Azerbaijani-German trade turnover up by 53%

    05 June 2023 - 11:34

    Sunak to lobby Biden to make Wallace next head of NATO

    05 June 2023 - 11:27

    Ukraine's defenders strike on clusters of Russian manpower 15 times

    05 June 2023 - 11:20

    Armenian saboteur wishing peace between Azerbaijan, Armenia

    VIDEO report from prison

    05 June 2023 - 11:13

    In new provocation, terrorist PKK/YPG supporters in Sweden target Turkish president

    05 June 2023 - 11:06

    Polish PM: Ukraine fighting for NATO's interests, deserves shortcut to Alliance

    05 June 2023 - 10:56

    Turkish army destroys YPG/PKK terrorists in Syria

    PHOTO

    05 June 2023 - 10:49

    Azerbaijan: Lachin border checkpoint works 24 hours a day

    Video by Caliber.Az

    05 June 2023 - 10:42

    Türkiye deploys special forces to Kosovo at NATO's request

    VIDEO

    05 June 2023 - 10:35

    Stoltenberg says Swedish NATO deal can be reached after more talks

    05 June 2023 - 10:28

    Russia starts naval exercises in Japan and Okhotsk Seas waters

    05 June 2023 - 10:21

    Azerbaijan rejects Armenian security chief's "misleading" remarks as unacceptable

    MFA statement

    05 June 2023 - 10:14

    Two drones fell on highway in Russia's Kaluga region - governor

    05 June 2023 - 10:07

    Türkiye, Hungary shake hands for mutual support within NATO

    05 June 2023 - 10:00

    Tehran, Ankara discuss expansion of bilateral ties

    05 June 2023 - 09:48

    Football legend Ibrahimovic retires

    05 June 2023 - 09:35

    Illegal Armenian armed gangs in Karabakh shell Azerbaijani positions

    Reconaissance flight intercepted by Azerbaijani troops

    05 June 2023 - 09:23

    Peace between Azerbaijan, Armenia can be imminent, says Yerevan's top official

    05 June 2023 - 09:10

    Rule-based, predictable Turkish economy key for prosperity - new finance minister

    05 June 2023 - 09:00

All news