US sanctions helping China supercharge its chip-making industry

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That supercharged growth underscores how tensions between Washington and Beijing are transforming the global $789 billion semiconductor industry.

Technologies to Hikvision spurred appetite for home-grown components.

In 2020, the US began restricting sales of American technology to companies like Semiconductor Manufacturing International and Hangzhou Hikvision Digital Technology, successfully containing their growth – but also fuelling a boom in Chinese chip-making and supply.While shares in the likes of Cambricon Technologies have more than doubled from lows this year, analysts say there may still be room to grow.

“Amid lockdowns, Chinese customers who mostly use imported semiconductors need to source homegrown alternatives to ensure smooth operations.”and more than $US430 billion worth of imported chipsets in 2021. Orders for chip-manufacturing equipment from overseas suppliers rose 58 per cent last year as local plants expanded capacity, data provided by industry body Semi show.

With local authorities’ help, cargo flights from Japan delivered essential materials and gear to chip plants as the city went under lockdown. SMIC recently reported a 67 per cent surge in quarterly sales, outpacing far larger rivals GlobalFoundries and TSMC.

 

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