China to pour billions into semi industry

Mao Tse Tung - Wikimedia CommonsMainland China doesn’t intend to be left on the back foot when it comes to semiconductor manufacturing and will spend something like $20 billion over the next five years.

That’s according to a report from Digitimes, which said that mainland China foundry Semiconductor Manufacturing International Company (SMIC) has already been pumped with government money.

The report said that nearly three quarters of the money will go to manufacturing integrated circuits and equipment.

China will also put money into companies making DRAM and NAND flash, an industry that is currently dominated by South Korean firms like Samsung and SG Hynix. Those two companies already have fabrication plants (fabs) in China.

And at the end of those five years the Chinese government hopes to have at least half of domestic demand for silicon chips made locally, the report said.

Recently, Taiwanese semiconductor companies have been urging their own government to allow export of chip technology to the mainland, now that the formerly frosty relations between them have thawed.