Disruptive.Asia Finds China Advances Chip Self-Sufficiency Amid Global Semiconductor Shortage
10.5.2021 13:00:00 EEST | Business Wire | Press release
Disruptive.Asia comments that a global shortage of semiconductors is expected to last until at least next year, which – along with geopolitical tensions, COVID-19 and other factors – has shone a spotlight on the vulnerability of the world’s semiconductor supply chain. While that’s encouraging various countries to beef up their domestic chipmaking capabilities – particularly China, which is already ahead of that particular curve – semiconductor players warn that self-sufficiency should restore balance to the global supply chain rather than replace it.
Disruptive.Asia believes that the current chip shortage is the consequence of issue of US export rules which prevent any company that uses US technology in any part of the chipmaking process from doing business with Huawei. Disruptive.Asia learns from C-level executives from Taiwan Semiconductor Manufacturing (TSMC) that the US crackdown on chip exports to China caused a rush to stockpile chipsets, creating short-term imbalance in the supply chain.
US’ acts have spurred China to beef up its own chipset capabilities to rely less on Western companies, with the goal of developing self-sufficiency in its domestic chipset sector by 2025. According to Li Ke of the China Semiconductor Industry Association, with China having already established a presence at every part of the 28nm-technology industry chain, China’s 28-nm chips are expected to become mature this year.
China is also making progress with smaller nodes, with 14-nm chips produced by Semiconductor Manufacturing International Corporation (SMIC) becoming a growing source of revenue for the firm, and expected to become mature in 2022. Meanwhile, a Goldman Sachs report in July 2020 predicted SMIC would be able to start producing 7-nm chips by 2023.
From Disruptive.Asia’s point of view, regardless of how geographical overconcentration of the global chip supply chain is addressed, the chip shortage is the most immediate problem – and it’s one that’s not going away soon. Consequently, semiconductor players are planning sizable investments in new fabs to scale up capacity.
About Disruptive.Asia
Disruptive.Asia covers the current state of digital disruption in the Asia-Pacific telecoms, fintech and internet sectors – where it’s coming from, what’s driving it, the impact it’s having on each industry, how the key players are responding and what’s next.
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