Shenzhen has established an international sourcing platform for semiconductors and other electronics components amid U.S. trade restrictions. The Electronic Components and Integrated Circuits International Trading Center Co, based in the city’s Qianhai economic zone, received its business license on December 30, according to several shareholders of the new entity. This trading center, with an initial capitalization of CNY2.1 billion, is financed by 12 state-owned enterprises (SOEs) and private companies, including China Electronics Corp (CEC) and local government fund Shenzhen Investment Holdings. CEC and subsidiary China Electronics Information Service Co each invested CNY380 million in the trading center, securing a similar 17.8% interest for each firm, while Shenzhen Investment injected CNY760 million to obtain a 35.7% stake. Other backers include electronics firm Shenzhen Huangqiang Industry Co, with a 3.5% share, and chip firm Shannon Semi, with a 1.7% stake.
The development of this trading center, which was initially announced by the National Development and Reform Commission (NDRC) and the Ministry of Commerce (MOFCOM) in January last year, is expected to engage various companies involved in the semiconductor and electronics industries around the world, including manufacturers and distributors. Shenzhen, which President Xi Jinping hand-picked in 2020 to become a world-class innovation powerhouse and model for economic reform, will also serve as a major location for procurement, software development, branding and training, among a range of services, according to the NDRC’s plan.
The plan reflects Xi’s strong belief that Shenzhen would become an important engine of growth for the Greater Bay Area development zone, as the city pushes reforms in line with China’s tech self-sufficiency strategy. The initiative comes amid tightened sanctions imposed by the U.S. on China’s semiconductor industry, which has hurt Beijing’s ambitions for the country to achieve technological self-reliance.
Last month, three dozen Chinese firms, including flash memory chip maker Yangtze Memory Technologies Co, were added by the U.S. government to its trade blacklist, citing concerns that Beijing was using commercial technologies to modernize its military. That marked a significant escalation from previous targeted sanctions against individual Chinese firms, such as Huawei Technologies and Semiconductor Manufacturing International Corp (SMIC), the South China Morning Post reports.
