Manufacturers in China are increasingly looking to source chips locally because they fear that the US and other governments might prioritize domestic users of the semiconductors vital to national security, a senior executive at Semiconductor Manufacturing International Corp (SMIC, 中芯) said yesterday.
Customers are telling SMIC that they need to secure a certain amount of capacity within China itself because of concerns the industry could become more fragmented, disrupting inflows from abroad, SMIC cochief executive officer Zhao Haijun (趙海軍) said.
Companies in China, where everything from Apple Inc iPhones to Volkswagen AG vehicles are manufactured, have increasingly turned to local component suppliers and assemblers.
“What we can make here is less than 10 percent of what they need. They are worried,” Zhao told analysts on an earnings call. “In the future, we may see that there is an oversupply of chips of certain nodes in some markets, but there will still be a shortage in some other markets.”
Governments from Tokyo to Washington and Brussels are racing to bolster chip ecosystems at home, wary of a heavy reliance on manufacturing in Taiwan and South Korea after a global component shortage affected the auto and electronics industries.
The US has also sought to limit flows of technology to China, which it considers a geopolitical rival, especially if it ends up for military use.
The global shortages have been particularly acute in more mature but traditionally underinvested 28 nanometer to 40 nanometer technologies, common in vehicles and machinery, spurring an aggressive buildup in those areas, including in China. That in turn has spurred fears of a glut.
SMIC intends to spend US$5 billion on upgrades and expansion this year, much of which is to go toward three giant new plants in Shanghai, Beijing and Shenzhen.
SMIC itself has been hit with US sanctions, which the company said has a major impact on its advanced technology development.
Zhao did not identify the customers he was referring to, although the company’s main customers include Datang Telecom Technology Co and Qualcomm Inc, data compiled by Bloomberg showed.
Shares of China’s biggest contract chip manufacturer jumped as much as 4.3 percent in Hong Kong after the company reported net income of US$534 million, beating analysts’ estimates.
‘SWASTICAR’: Tesla CEO Elon Musk’s close association with Donald Trump has prompted opponents to brand him a ‘Nazi’ and resulted in a dramatic drop in sales Demonstrators descended on Tesla Inc dealerships across the US, and in Europe and Canada on Saturday to protest company chief Elon Musk, who has amassed extraordinary power as a top adviser to US President Donald Trump. Waving signs with messages such as “Musk is stealing our money” and “Reclaim our country,” the protests largely took place peacefully following fiery episodes of vandalism on Tesla vehicles, dealerships and other facilities in recent weeks that US officials have denounced as terrorism. Hundreds rallied on Saturday outside the Tesla dealership in Manhattan. Some blasted Musk, the world’s richest man, while others demanded the shuttering of his
TIGHT-LIPPED: UMC said it had no merger plans at the moment, after Nikkei Asia reported that the firm and GlobalFoundries were considering restarting merger talks United Microelectronics Corp (UMC, 聯電), the world’s No. 4 contract chipmaker, yesterday launched a new US$5 billion 12-inch chip factory in Singapore as part of its latest effort to diversify its manufacturing footprint amid growing geopolitical risks. The new factory, adjacent to UMC’s existing Singapore fab in the Pasir Res Wafer Fab Park, is scheduled to enter volume production next year, utilizing mature 22-nanometer and 28-nanometer process technologies, UMC said in a statement. The company plans to invest US$5 billion during the first phase of the new fab, which would have an installed capacity of 30,000 12-inch wafers per month, it said. The
Taiwan’s official purchasing managers’ index (PMI) last month rose 0.2 percentage points to 54.2, in a second consecutive month of expansion, thanks to front-loading demand intended to avoid potential US tariff hikes, the Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) said yesterday. While short-term demand appeared robust, uncertainties rose due to US President Donald Trump’s unpredictable trade policy, CIER president Lien Hsien-ming (連賢明) told a news conference in Taipei. Taiwan’s economy this year would be characterized by high-level fluctuations and the volatility would be wilder than most expect, Lien said Demand for electronics, particularly semiconductors, continues to benefit from US technology giants’ effort
MULTIFACETED: A task force has analyzed possible scenarios and created responses to assist domestic industries in dealing with US tariffs, the economics minister said The Executive Yuan is tomorrow to announce countermeasures to US President Donald Trump’s planned reciprocal tariffs, although the details of the plan would not be made public until Monday next week, Minister of Economic Affairs J.W. Kuo (郭智輝) said yesterday. The Cabinet established an economic and trade task force in November last year to deal with US trade and tariff related issues, Kuo told reporters outside the legislature in Taipei. The task force has been analyzing and evaluating all kinds of scenarios to identify suitable responses and determine how best to assist domestic industries in managing the effects of Trump’s tariffs, he