BEIJING – In light of the global chip shortage and US sanctions, the Chinese Ministry of Industry and Information Technology declined to set targets for semiconductor production on Monday.
China wants to strengthen the self-sufficiency of competitive technologies and rely less on importing semiconductors or chips used in products from laptops to automobiles. The country had previously announced that it would produce 40% of the chips used by 2020 and increase this quota to 70% by 2025.
When the ministry spokesman, Tian Yulong, was asked about the goals of chip manufacturing at a press conference on Monday, he did not provide any specific figures. Instead, he outlined how the government is supporting the industry with measures such as tax cuts and talent development.
“The development of the semiconductor industry faces opportunities and challenges that require the world to strengthen cooperation and build the semiconductor industry chain together so that it can develop in a healthier and more sustainable manner,” said Tian, according to a CNBC translation of his Mandarin language note .
His comments come from the fact that a global shortage of chips is forcing large automakers to cut production. The semiconductor manufacturing backlog resulted from high demand for electronics amid the coronavirus pandemic and a highly specialized global supply chain that was under additional pressure from the US-China trade tensions that began under former President Donald Trump.
Last year, the Trump administration placed restrictions on China’s largest chip maker, SMIC, preventing it from purchasing high-end equipment needed for production.
It is not yet clear what specific action US President Joe Biden will take. Last week he signed a supply chain review ordinance to address the shortage.
Meanwhile, China’s Ministry of Industry and Technology is trying to improve supply chain coordination in the country’s auto industry, where 90% of the chips used are imported. This comes from a state media report on Friday.
During the press conference on Monday, Ministerial Director Xiao Yaqing said that ensuring the resilience of the supply chain is a priority.
“We must put the improvement of the stability and competitiveness of industrial chains and supply chains in a prominent position … and firmly take the initiative in the highly competitive international market,” said Xiao.
Nationwide, data suggests China has failed to meet its target of 40% domestic sourcing in 2020 amid the coronavirus pandemic.
According to US research firm IC Insights, only 15.9% of the $ 143.4 billion worth of integrated circuits sold in China last year – another name for semiconductors – were made in the country.
China’s leaders will open an annual parliamentary session this week to set national development goals for the next five years and beyond.
– CNBC’s Arjun Kharpal contributed to this report.
