China Stops Semiconductor Chip War With America
Beijing is trying to avoid unproductive investmentsChina is looking for alternatives to help local chipmakersThe world's second largest economy, China was forced to forget its desire to compete with the United States after it halted massive investment in chip development.Top officials are now reportedly looking for ways to shift away from the subsidies they have implemented to increase China's chances of producing chips that can compete with US production.The move is partly a response to subsidies that have failed to produce the expected results as well as financial pressure caused by Covid-19.The streak, Chinese leaders are looking for ways to help local chipmakers, including by reducing the cost of semiconductor materials.This will indirectly signal a change in Beijing's approach towards an industry that is considered essential to challenging American dominance and protecting China's economic and military competitiveness.Beijing has invested tens of billions into the industry over the past decade and developed the National Integrated Circuit Industry Investment Fund (NICIIF), a government investment fund to expand semiconductor manufacturing capabilities.NICIIF is used by China to help some local chip manufacturers such as Semiconductor Manufacturing International Corp. and Yangtze Memory Technologies.However, those companies are the target of export controls implemented by the Biden administration to restrict access to military-grade chips.Production has also been severely affected by the zero Covid policy which has slowed down manufacturing and restricted product access.
Beijing is trying to avoid unproductive investments
China is looking for alternatives to help local chipmakers
The world's second largest economy, China was forced to forget its desire to compete with the United States after it halted massive investment in chip development.
Top officials are now reportedly looking for ways to shift away from the subsidies they have implemented to increase China's chances of producing chips that can compete with US production.
The move is partly a response to subsidies that have failed to produce the expected results as well as financial pressure caused by Covid-19.
The streak, Chinese leaders are looking for ways to help local chipmakers, including by reducing the cost of semiconductor materials.
This will indirectly signal a change in Beijing's approach towards an industry that is considered essential to challenging American dominance and protecting China's economic and military competitiveness.
Beijing has invested tens of billions into the industry over the past decade and developed the National Integrated Circuit Industry Investment Fund (NICIIF), a government investment fund to expand semiconductor manufacturing capabilities.
NICIIF is used by China to help some local chip manufacturers such as Semiconductor Manufacturing International Corp. and Yangtze Memory Technologies.
However, those companies are the target of export controls implemented by the Biden administration to restrict access to military-grade chips.
Production has also been severely affected by the zero Covid policy which has slowed down manufacturing and restricted product access.
