The Shenzhen Development and Reform Commission and other local authorities on Monday (June 6th) jointly unveiled a plan to develop the metropolis’s semiconductor industry, reports the South China Morning Post. This project, which is based on government investment, should make it possible to double the production of chips by 2025 to make China more independent. The city wants to be able to generate $37.5 billion in annual revenue from this sector.
Make Shenzhen a semiconductor ‘pole of influence’
Like other Chinese economic hubs, Shenzhen has suffered from the government’s zero covid policy. The city had to close its factories for a week in March. In April, China’s semiconductor production fell 12.1% from a year earlier, with 25.9 billion chips manufactured. The recent easing of health restrictions has allowed cities to resume almost normal industrial activity.
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Shenzhen is mainly home to digital companies, the social network giant Tencent or one of the telecom leaders, Huawei. Local authorities now want to make the metropolis a “ center of influence in the semiconductor industry. The city seeks to contribute to the development of national capabilities in chip manufacturing, packaging and testing, to strengthen the country’s self-sufficiency. The goal is to double Shenzhen’s output from $16.5 billion in 2021 to $37.5 billion in semiconductor revenue by 2025.
To achieve this, the city is targeting several goals, including the development of at least three integrated circuit design companies. They are expected to achieve annual sales worth $1.5 billion each. Shenzhen also wants to set up three chipmakers that could generate $300 million in annual revenue.
The metropolis will have to redouble its efforts to achieve its objective
Xie Ruifeng, general manager of semiconductor research at Chinese consulting firm ICwise, says the $37.5 billion revenue target is achievable. According to him, the metropolis has ” some advantages in the development of a semiconductor industry. This includes its proximity to resources for innovation, strong government funding and an active private capital market. “. He adds, however, that the city still lacks local wafer manufacturing capabilities, which will be the focus of Shenzhen’s efforts “.
With this in mind, Shanghai-based Semiconductor Manufacturing International Corporation (SMIC), China’s largest chipmaker, is building a factory in Shenzhen. It should be completed by the end of 2022. The company had announced an investment of 2.35 billion dollars in this project, with the objective of producing 40,000 silicon wafers of about thirty centimeters per month.
China is stepping up its efforts to strengthen its independence in the technology sector. The country reduced its semiconductor imports by 11.4% in the first four months of 2022. Yet Chinese industry still depends heavily on foreign technologies, such as software and production equipment, to manufacture products. semiconductors. His efforts could be challenged by the rivalry between Washington and Beijing. The United States takes advantage of its access to more advanced technologies to get ahead of the Middle Kingdom.