China’s ‘Made in China 2025’ plan will not meet its targets, a report has released. Digi Times It quotes Wei Shaojun, a professor at Tsinghua University and vice president of the China Semiconductor Industry Association. Chinese chip makers not only cannot meet 70% of the local IC demand in 2025, but also lag far behind their rivals in terms of profitability, capital and R&D investment capacity.
In a recent speech at the China Nansha International IC Industry Forum, Wei Shaojun said that domestic chips achieved 70% domestic chips despite the fact that the value share of domestic chips rose from 13% in 2013 to 41.4% in 2022. He pointed out that the ambitious target of Semiconductor dependency, a key goal of the Made in China 2025 initiative, appears nearly unattainable. That’s because of current global shifts, with both the US and Europe funding the semiconductor sector out of government pockets.
Wei stressed the imbalance between supply and demand in China’s IC design sector, saying that the country’s monthly demand is about 1.5 million 300mm wafer monthly starts (WSPM), while domestically-owned Chinese semiconductor manufacturers pointed out that it can only provide a monthly output of 440,000 sheets. WSPM.
A professor at Tsinghua University, who has made particular contributions to the development of the local IC sector, highlighted serious misconceptions about the progress of China’s chip manufacturing sector over the past decade.
The accelerated growth of China’s semiconductor manufacturing industry is largely due to foreign companies operating in the country. Since 2016, Chinese investor-owned semiconductor companies have recorded an average compound annual growth rate (CAGR) of 14.7%. However, his CAGR for wafer manufacturing companies outside of China such as Taiwan and South Korea is as high as 30%. This not only doubles the pace of expansion of Chinese-owned enterprises, but also highlights the continued dependence of China’s semiconductor manufacturing industry on external support.
A senior official of the China Semiconductor Industry Association also pointed out that China’s listed semiconductor companies are currently suffering from notable performance declines due to low gross margins in the IC design sector.
With Nvidia’s market value skyrocketing to more than $1 trillion due to the AI boom, Wei Shaojun said the combined value of 135 Chinese semiconductor companies listed on China’s STAR and ChiNext markets is less than half that of Nvidia. pointed out. In addition, the average gross margin of these companies in 2022 is 39.1%, especially 34.2% of STAR listed IC design companies, which is significantly lower than the 60% or more enjoyed by US chip developers, while Chinese companies It shows that they are still operating with low profitability. level.
Judging by China’s domestic CPU and GPU efforts, there is still much work to be done to close the gap.
