High-level Chinese official admits chip development problematic

30-Nov-2020 Intellasia | TaiwanNews | 6:50 AM Print This Post

A high-level Chinese official admitted at a forum on Saturday (November 28) that many of the country’s chip projects are short-sighted and comprehensive supervision of the industry is required.

Vice minister of the Ministry of Industry and Information Technology (MIIT), Wang Zhijun, attended the China Development Forum and expressed concerns about overcapacity in industries such as steel, cement, electrolytic aluminum and the semiconductor industry. Wang added they need close supervision.

“Joining those problematic investments, the number of Chinese chipmakers has surged in the past year, which was followed by a swarm of short-sighted investments and, even worse, abandoned projects.”

Speaking about government support to make the country self-reliant for semiconductors, Wang said there was a need for mergers or restructuring to improve competitiveness. According to open data, over 50,000 Chinese companies registered as semiconductor companies this year.

This is four times the combined number over the previous five years. Many of them are said to be owned by companies with no connections to the industry, such as real estate agencies, cement manufacturers, and food providers. State-backed subsidies and tax exemptions are thought to be responsible for this.

Separately, former Wuhan Hongxin CEO Chiang Shang-yi, who was poached by the Chinese company from Taiwan Semiconductor Manufacturing Co. (TSMC) years ago to lead the ambitious state-backed chip project, recently described his experience with the Chinese company as a “nightmare” but declined to elaborate. Chiang was said to have left China for the US in July.



Category: China

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