China’s cunning semiconductor plans

China’s semiconductor production has grown massively in recent years. Where in 2000 the country only manufactured 2.2 billion dollars’ worth of chips and related devices, that number was 60 billion last year. That’s a little less than one fifth of the global market, and twice as much as Europe manufactures.

Yet it’s not nearly enough for the Chinese government. It ruffles the powers that be in Beijing that of the 145 billion dollars in semiconductors that China uses to produce electronics, at most one third is manufactured at home. The imbalance has been growing for years (see figure 1). What’s more, China manufactures primarily the simple stuff; the country’s role in advanced chips is insignificant.