China’s electric car industry is booming, however, the Japanese media revealed that China’s homemade car chip supply is less than 5%, leading to a decline in passenger car sales in September, the key is the “lack of core”. According to a research report, China’s self-sufficiency in chips in 2020 only reached 15.9%, far behind the goal of 70% by 2025. Analysis pointed out that China’s semiconductor industry in the production equipment, technology and materials on the neck, to break through there are still big problems.
Comprehensive media reports, China’s National Federation of Passenger Car Market Information released the latest statistics on the 12th, September passenger car retail sales of 1.582 million units, an annual decline of 17.3%. Cui Dongshu, secretary-general of the Federation, said that the key to the relatively sluggish car market in September this year was the “lack of core (car chip)”, which led to the lack of cars to sell. Cui Dongshu analysis, mainly due to the key chips and components of overseas supply blocked, the supply chain problems can only be supplied on a weekly basis, the production loss is huge.
“Nikkei Asia” 13 in the report, quoted the Chinese Automobile Industry Association Deputy Secretary General Ye Shengji talk, “China’s automotive industry in the domestic supply of semiconductor less than 5%.”
An employee manufactures chips at the Jiejie Semiconductor factory in Nantong, Jiangsu province, March 17, 2021. (AFP)
Liu Mengjun, director of the Institute of Mainland Economics at Taiwan’s Chinese Academy of Economic Research, said in an interview with the station that in addition to breaking through traditional batteries and power systems, the biggest bottleneck in China’s electric vehicle development is still in vehicle electronics, chips for automobiles, mainly in third-generation compound semiconductors. “This piece of process technology does not need to be too far ahead of the curve, I suspect he will want to ‘bend’ and try to find used, or other production equipment for modification, in line with his third-generation semiconductor use, perhaps the strategy he adopted.”
In the field of semiconductor materials, the first generation of semiconductors is “silicon”, the second generation of semiconductors is “gallium arsenide”, the third generation of semiconductors is “silicon carbide” (SiC) and “Gallium Nitride (GaN).
The third generation of semiconductor is not accumulated from the first and second generation of semiconductor technology, comprehensive media reports, China will put forward the “14th Five-Year Plan” in October, will bet about RMB 10 trillion to support the development of the third generation of semiconductor industry.
According to an analysis by the Technology Industry Information Office (iKnow) in September this year, the development of semiconductor technology requires the accumulation of talent, capital and technology for a long time, and it is very difficult for China to develop completely independent technology, and it may be difficult to achieve results without more than 10 years of effort. However, mainland China believes that directly cutting into the third generation of semiconductor materials, “may have the opportunity to lift the golden spell of U.S. de-Chineseization, so that China’s semiconductor industry autonomy.”
Although China is the world’s largest chip consumer market, it does not mean that China has the ability to produce its own IC chips. According to a survey report by IC Insights in January this year, the number of China’s self-produced semiconductors accounted for 15.9% of China’s semiconductor market in 2020, up from 10.2% in 2010, and is forecast to increase to 19.4% in 2025, but this is far short of the 70% target set by the Communist Party of China.
And of the 15.9% self-sufficiency rate in 2020, only 5.9% of the number of semiconductors are produced in China by the head office, while the remaining 10% are produced by major international manufacturers with plants in China, including TSMC, SK Hynix, Samsung and Intel.
Employees wearing masks and protective clothing work on a smart chip production line in Sihong, Jiangsu province, Feb. 16, 2020. (AFP)
Liu Mengjun: China still stuck in semiconductor equipment, technology, materials
Liu Mengjun mentioned that the relationship between the United States and China can not be handled well, the United States still has a lot of control over China’s semiconductor equipment, China is trying to make a breakthrough in the self-sufficiency rate of semiconductor production equipment, and then reach his own rate of chip production, but still faces three major problems.
Liu Mengjun: “I think the production equipment is obviously more technical barriers than the rate of self-production of chips, some of the so-called barriers are the technology of the process, in addition to the technical standards in his equipment and material issues, materials also include chemical, gas, and silicon wafers. In other words, to overcome several difficulties, if the chip has been in the hands of others, China’s technological development and the challenges of the future of the attack is getting bigger and bigger.”
Liu Mengjun mentioned that China may be able to copy the Russian model, although Russia has not much breakthrough in the chip, but he can reach a certain level of achievement in science and technology, it is clear that will be hampered by bottlenecks. Liu Mengjun said, “China’s semiconductor “Big Fund” (Big Fund) from the first phase has now entered the second phase, it is clear that he held the national system in science and technology to do some breakthroughs.”
China’s big money to support the semiconductor industry Jiang Yaqi: China’s “intellectual property” protection que
In 2014, China’s State Council promulgated the “National IC Industry Development Promotion Program” by the Ministry of Industry and Information Technology and other units, jointly set up the “National IC Industry Investment Fund” the first phase of the total size of 138.72 billion yuan, the “program” said, mainly focused on supporting the field of integrated circuit manufacturing, taking into account the design, packaging and testing, equipment, materials. The second phase of the fund will be established in 2019, and the registered capital will exceed RMB 200 billion (RMB 204.15 billion).
Employees wearing protective equipment work at Renesas Electronics’ semiconductor production facility during a government-organized tour for journalists in Beijing, May 14, 2020. (Associated Press)
Taipei University of Science and Technology’s Institute of Intellectual Property Associate Professor Jiang Yaqi told the station that the United States strictly prevented China from using advanced U.S. technology, and now China is experiencing difficulties, only though China has invested many resources, but there are big problems in innovation. For example, from Taiwan and other countries poached semiconductor talent, these talents left the original environment, to China did not play the expected function.
Jiang Yaqi: “I think the local corporate culture and innovation culture, that there is a gap between the two places. So we will see that in order to develop key innovative technologies, it requires not only monetary investment, but also a national culture of innovation such as the protection of intellectual property rights, a modern corporate governance environment, and these new cutting-edge technology start-ups are very critical.”
China’s Communist Party Fears “Extreme Measures” to Break U.S. Sanctions
If U.S. sanctions remain in place, will China be able to reach its goal of 70 percent chip self-sufficiency by 2025?
“I can’t say that there is no chance at all!” Liu Mengjun said that the Chinese Communist Party will still use various extreme means, such as the “Meng Wanzhou incident” to take political measures to solve the problem, such as the recent U.S. Navy engineers attempted to sell the secrets of nuclear-powered attack submarines, Liu Mengjun believes that the Chinese Communist Party will also actively in this piece (under the efforts).
Liu Mengjun: “In the past, China did not do ‘two bombs and one star’, from the human head to breakthroughs, the introduction of talent, all kinds of scientific and technological research and development confidential breakthroughs will still be there, and even China in the data hacking, etc.. Squatting horse stance at home practice will still do, various means to find technology from outside or will be more active.”
Jiang Yaqi believes that in the past, China relied on a large amount of labor and market, through a very smooth stage of rapid economic development, but can not solve the new innovation, cutting-edge technology, as well as the integration of the supply chain is also a severe test, these have touched China’s “soft underbelly”, Jiang Yaqi said, China has no way to adjust over, and even unwilling to To adjust.
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