American Semiconductor Industry Association: The Chinese market is critical to the success of international chip companies
Time:2021-08-25
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American Semiconductor Industry Association: The Chinese market is critical to the success of international chip companies
On July 13, the American Semiconductor Industry Association released a white paper to take stock of China‘s semiconductor industry. The white paper pointed out that the Chinese market is vital to the success of any globally competitive chip company today and in the future. The expansion or even complete decoupling of China from China will cause the global market share of US chip companies to drop by 8% to 18%, and it is recommended The United States‘ response to semiconductor competition should be based on the improvement of technological competitiveness and the enhancement of supply chain flexibility.
The Chinese market is very important for international semiconductor companies.
The white paper information shows that China is the world‘s largest manufacturing center, producing 36% of the world‘s electronic products, including smartphones, computers, cloud servers, and telecommunications infrastructure, consolidating China‘s position as the largest node in the global electronic product supply chain. In addition, China has nearly one-fifth of the world‘s population and is the second largest final consumer market for embedded semiconductor electronic equipment after the United States.
In 2020, China imported up to 378 billion U.S. dollars of semiconductors, assembled 35% of the world’s electronic equipment, accounted for 30% to 70% of global exports of TVs, personal computers, and mobile phones, and consumed four of all semiconductor-enabled electronic products. One part. Entering this huge market is critical to the success of any globally competitive chip company today and in the future.
The white paper pointed out that as a latecomer in the semiconductor field, China‘s local chip industry is relatively small, accounting for 7.6% of total global semiconductor sales. China is expected to be competitive in areas such as memory, mature node logic foundries and fabless chip design, especially in consumer and industrial applications. However, China is in advanced logic foundry technology, general high-end logic (ie CPU/GPU/FPGA), advanced manufacturing equipment and materials (photoresist, lithography technology, etc.), as well as EDA software and IP related to cutting-edge logic chips. Aspects may still lag for a while.
Enhance technological competitiveness and supply chain flexibility to cope with competition.
The white paper shows that the semiconductor industry is a truly global industry, and access to the global market is essential for US companies to maintain high levels of R&D investment and capital expenditures. The semiconductor industry is the most R&D and capital-intensive industry in the world and requires a huge scale to sustain these investments. A recent study found that the expansion or even complete decoupling from China will cause US chip companies’ global market share to fall by 8% to 18%, leading to a sharp reduction in R&D and capital expenditures, as well as the loss of up to 124,000 American jobs. The U.S.‘s global leadership in the industry has declined. Keeping American semiconductor companies into the Chinese market to sell general-purpose commercial chips is critical to ensuring American competitiveness.
The white paper suggests that the real and lasting solution to the increased competition in semiconductors is to speed up operations by investing in the United States’ own technological competitiveness and strengthening the resilience of the domestic and alliance partners’ supply chains.
Prior to this, the US Senate passed the "American Innovation and Competition Act", which included US$52 billion in federal semiconductor investment. If the United States wants to compete and gain an advantage in the future game-changing technology field, it must take the lead in the semiconductor field. This is widely recognized by Congress. The bill includes funding for a bold semiconductor manufacturing funding program, a new National Semiconductor Technology Center, and increased research and development funding for institutions such as the Defense Advanced Research Projects Agency (DARPA) and the National Institute of Standards and Technology (NIST). The white paper pointed out that the promulgation of this important legislation will effectively promote the development of the US economy, national security and important infrastructure, and form lasting global competitiveness.
