xi's moments
Home | Technology

Nation indispensable part of global chip industry

By MA SI in Beijing and HU MEIDONG in Fuzhou | chinadaily.com.cn | Updated: 2022-08-04 22:53

A technician tests chips at a tech firm in Hefei, Anhui province. [Photo by Xie Chen/For China Daily]

Chinese mainland consumes more than 50 percent of all semiconductors in the world

The Chinese mainland is the world's largest chip market and is an indispensable part of the global semiconductor industrial chain, so no companies based in Taiwan will ignore this and healthy cross-Straits cooperation in the strategically important industry will benefit both sides, industry experts said on Thursday.

The comment came after US House of Representatives Speaker Nancy Pelosi reportedly met with the chairman of Taiwan Semiconductor Manufacturing Co, the world's largest contract chipmaker, on Wednesday, triggering concerns about its possible negative impact on the future of cross-Straits chip business.

The move is just another attempt by Washington to force Taiwan chip companies — which are struggling with the COVID-19 pandemic — to choose sides, and such efforts will further disrupt the global semiconductor industry, the experts said.

Pelosi and TSMC Chairman Mark Liu discussed the US CHIPS and Science Act, which was recently approved by the US Congress and is expected to soon be signed into law by US President Joe Biden, according to a Fortune report. The legislation will give $52 billion in subsidies to support chip manufacturing in the US.

TSMC is likely to be a beneficiary of the US legislation, as it is building a $12 billion chip factory in Arizona. But the legislation has a caveat in that companies receiving funding must promise not to boost production of advanced chips in the Chinese mainland, Bloomberg reported.

"Washington uses heavy subsidies as bait to force chip companies to choose sides. But the move will not likely produce the results it intends," said Zhong Xinlong, a senior consultant at the Beijing-based China Center for Information Industry Development Consultancy.

The Chinese mainland consumes more than 50 percent of all semiconductors in the world, which are then assembled into tech products to be exported or sold in the domestic market, according to market research company Daxue Consulting.

The Chinese mainland imported nearly $432.55 billion worth of integrated circuits in 2021, of which 36 percent came from Taiwan, according to data from the China Chamber of Commerce for Import and Export of Machinery and Electronic Products.

"The logic is simple and clear: The Chinese mainland is too big a market for any chip company to ignore," Zhong said.

His views were echoed by the Semiconductor Industry Association, a Washington-based group that represents the US semiconductor industry.

"Access to this massive market is essential to the success of any globally competitive chip firm today and in the future," the association said in a report.

Roger Sheng, vice-president of research at the US market research company Gartner Inc, said the meeting poses a dilemma for TSMC. It has plants on the Chinese mainland and sees potential for strong growth there.

TSMC generates about 10 percent of its revenue from the mainland, and, more importantly, it makes chips for big companies such as Apple Inc and Qualcomm Inc which also heavily rely on the Chinese mainland for revenues and profits, he said.

"TSMC, of course, does not want to give up the Chinese mainland market, but it has to deal with pressure from the US," Sheng said.

The Chinese mainland is also making progress in semiconductor manufacturing. For the first time, three Chinese mainland chipmakers accounted for more than 10 percent of the global contract chipmaking revenue in the first quarter of the year, said TrendForce, a market research and intelligence provider.

"Pelosi's meeting is adding new uncertainties, and the move could further disrupt global semiconductor industrial chains," said a senior executive from a Chinese mainland chip company who declined to be named. "But in fact, the Chinese mainland and Taiwan are very complementary in semiconductors, and could integrate our respective advantages and resources for better development."

"I am very positive and optimistic about the future of cross-Straits relations. The preferential policies the Chinese mainland offers to Taiwan entrepreneurs, and the long-term good interaction between people on both sides of the Straits have already opened a door that can never be closed," said Wu Chia-Ying, president of the Taiwan Businessmen Association in Xiamen, Fujian province.

Global Edition
Copyright 1995 - . All rights reserved. The content (including but not limited to text, photo, multimedia information, etc) published in this site belongs to China Daily Information Co (CDIC). Without written authorization from CDIC, such content shall not be republished or used in any form. Note: Browsers with 1024*768 or higher resolution are suggested for this site.
License for publishing multimedia online 0108263

Registration Number: 130349