BEIJING - China is planning a sweeping set of new government policies to develop its domestic semiconductor industry and counter Trump administration restrictions, conferring the same kind of priority on the effort it accorded to building its atomic capability, according to people with knowledge of the matter.
China's top leaders will gather next month to lay out their economic strategy for the next half decade, including efforts to ramp up domestic consumption and make critical technology at home. "The Chinese leadership realises that semiconductors underpin all advanced technologies, and that it can no longer dependably rely on American supplies," said Mr Dan Wang, technology analyst at research firm Gavekal Dragonomics."In the face of stricter US restrictions on chip access, China's response can only be to keep pushing its own industry to develop."
But deteriorating ties between Beijing and Washington have made it increasingly difficult for Chinese companies to source components and chipmaking technologies from overseas. This month, Huawei, the country's largest handset maker, will even lose access to chips from the likes of Taiwan Semiconductor Manufacturing under new American regulations that prohibit suppliers anywhere in the world from working with the company if those suppliers use American equipment. The tighter rules have raised the urgency of building domestic alternatives in Beijing.
Global leaders such as US-based Cree and Japan's Sumitomo Electric Industries are just beginning to grow this business, while Chinese tech giants such as Sanan Optoelectronics and state-owned China Electronics Technology Group have made inroads on third-generation chipsets.