According to a recent report in Chosun Ilbo, the news that HSMC, which is considered a “superstar” in the Chinese semiconductor industry, has stopped construction of its factory due to financial difficulties has caused an uproar in China. Such a company has suddenly run into financial difficulties, and local Chinese public opinion is saying that it is probably a “scam to get government subsidies for semiconductors.
The Chosun Ilbo earlier reported that the Chinese semiconductor company HSMC, which is building a factory the size of 59 soccer fields, is a scam, and on February 2, the Chinese economic media “China Business News” reported that “there is not even any traffic at the construction site of the Wuhan Hongxin (HSMC) factory, a semiconductor foundry at the National Industrial Base in Wuhan, China. According to the report, there are only three barely covered building frames on a site equivalent to 59 soccer fields (424,000 square meters). In an interview with China Business News on the same day, an employee of the construction company at the site said, “Workers’ wages have been delayed for eight months.”
According to an analysis by local Chinese media, “HSMC set almost impossible goals from the start, and the blind investment frenzy in the semiconductor industry covered up HSMC’s flaws.” HSMC has declared that it will “build 14nm and 7nm production lines in Wuhan Industrial Park to produce 60,000 wafers per year.” Currently, among the world’s semiconductor manufacturers, only Samsung and TSMC are capable of mass production in the 7nm process, yet HSMC claims to be able to surpass this technology gap.
According to the report, HSMC’s problems began to surface in January of this year when a lawsuit was filed over unpaid factory construction costs, and in July, the Wuhan city government released a report stating that “HSMC’s semiconductor project is facing a standstill crisis due to lack of funds,” confirming the decline of HSMC. In January, Chinese economic media reported that “HSMC’s lithography machine, the only one capable of producing 7nm chips in China, was mortgaged to a bank, and it was learned that it was actually an outdated device produced years ago,” according to a Chosun Ilbo report.
According to the Chosun Ilbo report, the semiconductor program also deceived the Chinese government. In response to the HSMC incident, there are voices in China saying “we should reflect on our blind investment in the rise of semiconductors”. China’s NetEase reported, “The number of unqualified companies receiving investment and then closing down is on the rise.” Semiconductor industry sources said: “With the increasing intensity of U.S. sanctions, the urgent need to achieve ‘chip self-sufficiency’ case, the government put out a lot of subsidies and investment, appeared similar to the HSMC such a ridiculous scam.”
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