Coastal Jiangsu province, a key chip manufacturing hub, will host a special online event to encourage foreign semiconductor design firms to partner with local peers, as the country moves to strengthen its industrial ties with the outside world amid U.S. efforts to reduce China’s role in the global chip supply chain. The online seminar, scheduled in June, is designed to promote international cooperation between local semiconductor firms and their Asian, European and U.S. counterparts, according to a notice published by the Wuxi Semiconductor Industry Association.
The event will facilitate collaboration in chip design, packaging testing, manufacturing and applications. Tens of thousands of semiconductor companies will join the event, which is open to new companies. The cities of Nanjing, Wuxi and Suzhou, all located in Jiangsu, are home to assemblers of Chinese chip giants. The mainland factory of Taiwan Semiconductor Manufacturing Co (TSMC), the world’s most advanced fab, is located in Nanjing, while a memory chip plant of South Korean chip maker SK Hynix is based in Wuxi.
This comes as the setting up of the U.S.-led Indo-Pacific Economic Framework (IPEF), which includes Japan and South Korea, raises concerns that Washington is trying to limit China’s role in key industries, particularly semiconductors. SK Hynix has reportedly put its expansion plan in Wuxi on hold under U.S. pressure, after Washington barred the company from shipping advanced equipment to its Chinese plants. The move dashed Wuxi’s hope of developing cutting-edge production. Recent Omicron outbreaks in the region and strict lockdown measures under China’s zero-Covid strategy have dealt another heavy blow to local chip companies.
In April, China’s chip output dropped to a two-year low. “The unstable production output in the region has caused a lot of companies to lose their overseas orders,” Song Xuetao, Analyst at Tian Feng Securities, wrote in a recent research report. About 40% of semiconductor companies in the area are now considering transferring their manufacturing capacities to South Korea, Japan, Taiwan and countries in Southeast Asia, according to Song’s estimates, the South China Morning Post reports.
The China Daily adds that China's inland regions are now also emerging as key incubators for innovation vital to growth over the next decade. Hefei, capital of Anhui province, for instance, is now a magnet for companies exploring technologies such as artificial intelligence (AI). In 2021, the city was home to more than 840 AI-related companies, up 23.2% year-on-year. Meanwhile, more than 860 new companies have been registered in Shenyang, capital of Liaoning province, in the past two years to do robotics research.
Nanchang, capital of Jiangxi province, said this year it will build a pilot zone for the metaverse, which will feature a combination of virtual reality software and hardware companies. The province has already attracted more than 400 companies, including international heavyweights such as Qualcomm and Microsoft, as well as China's Alibaba, Tencent and Huawei to set up local VR businesses.
Southwestern China is also showing strong momentum. Now one out of every three laptop computers and one out of every 10 smartphones sold globally come from Chongqing. At the same time, 70% of the world’s iPads and nearly 20% of global laptop computers are produced in Chengdu, capital of Sichuan province.
The size of the electronic information sector in Chengdu and Chongqing now accounts for about one-third of that of the global electronic information industry. Sichuan had more than 1,500 Internet of Things (IoT) companies in 2021. “The electronic information industry features a global market that mainly relies on air transport. As a result, building factories in western China does not have a location disadvantage compared with that of the East,” Dai Bin, Director of the Research Center for Regional Economics and Urban Management at Southwest Jiaotong University, said. Wei Jianqiang, Vice President of Lenovo, said that “Southwest China is a new standout on the map of China’s smart technology industry.”
