China Poured Nearly $2 Billion Into Its Own Semiconductor Industry Last Year
The Chinese government aims to break out of US technological sanctions using one of the oldest tricks in the book. It’s about throwing money into the problem. According to a report from of south china morning postas covered Digi Timesthe Chinese government poured 12.1 billion yuan (US$1.75 billion) in subsidies to about 190 listed semiconductor companies in its territory.
As China attempts to catch up with and outsmart its enemies on the geopolitical stage, it is pouring billions of dollars into key areas to become technologically independent from the entrapped Western world.
Those $1.75 billion may seem dwarfed in comparison to giant packages such as the US CHIPS Act (a $76 billion injection into the semiconductor industry with tough guardrails against potential Chinese profits). yeah. His $47 billion pledge in the EU. Or even his $11 billion investment in a German semiconductor factory planned by TSMC. But direct subsidies to China’s semiconductor industry aren’t the only move by the commission.
For one, China surpassed the United States in the number of papers submitted to the prestigious International Solid-State Circuits Conference (ISSCC 2023) this year. It’s an interim step to find ways to give the country its own research and development capabilities to limit potential future sanctions. And these research findings are undoubtedly underpinned by China’s investment in education, with nearly $179 billion in funding in 2022 alone, with her $5 billion infusion of cash into certain universities. it was done.
Another factor that keeps China from being technologically trapped is the fact that the country is the world’s rare earth metals extraction, processing and trading hub. This is a component used in the semiconductor itself. Sanctions (and their severity) must take into account the possibility of China turning off the taps on these essential components (or at least tightening it up a bit), so in this area a daily balancing act may have been performed.
So $1.75 billion is just the tip of the proverbial iceberg. China’s approach to semiconductor independence is multifaceted, with funds many times more than his reported $1.75 billion pouring in from multiple sources. Whether that will be enough for China to catch up with the United States remains to be seen.
