China Bets on Semiconductor Industry Against US Threats

As China grows its technology ambitions, the US government more often and aggressively threatens to cut off its supply chain from abroad. Facing this scenario, the Asian country is now planning a broad set of new government policies to develop its domestic semiconductor industry and counteract Donald Trump's administration’s restrictions. In doing so, the Chinese government is giving the same kind of priority to the effort it has given to developing its atomic capacity, sources close to Bloomberg said this week. Beijing is preparing extensive support for the so-called third-generation semiconductors.

Among the measures being taken by the Asian giant are economic support to boost research and education. China's top leaders will meet in October to design their economic strategy for the next half-decade, including efforts to increase domestic consumption and build new technology, reported Bloomberg. According to CNBC, China aims to produce 40 percent of the semiconductors it uses by 2020 and 70 percent by 2025. President Xi Jinping has promised an estimated US$1.4 billion through 2025 for technologies ranging from wireless networks to artificial intelligence (AI).

“China is trying to be self-sufficient as it prepares for a long-term economic, technological and geopolitical rivalry with the US. However, like many of Beijing’s well-intentioned industrial policies, support for the semiconductor industry could also lead to wasteful spending and excess capacity,” wrote Zhou Xin in a column for South China Morning Post on Thursday.

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