TELF AG analyzes a recent Chinese initiative in the semiconductor sector
New supports for the sector
China has announced the creation of a new $47.5 billion fund to revive the semiconductor sector, with the Chinese Ministry of Finance holding the majority of shares, with a 17% stake and paid-up capital of 60 billion yuan. The second largest shareholder is the China Development Bank. This fund, the largest of three launched by China in the semiconductor sector, demonstrates the country’s determined commitment to becoming a powerhouse in the field of semiconductor technologies.
Although the funding is massive, it will take time before concrete results are seen. However, the move indicates a clear intent on China’s part to reduce dependence on foreign suppliers and build a solid domestic supply chain for semiconductors. So far, Chinese financing in the sector has mainly focused on China’s two largest chip foundries, Semiconductor Manufacturing International Corporation and Hua Hong Semiconductor. However, with this new fund, an increased focus is expected on chip manufacturing equipment, which is relevant to establishing comprehensive and competitive manufacturing capacity.
To achieve a certain level of independence in this sector, China is focusing heavily on the activity of some giants such as Semiconductor Manufacturing International Co, which currently represents the third largest company in the sector in the world in terms of turnover. A rather interesting piece of data, which emerged from a survey by the consultancy firm Omdia, concerns the data on the consumption of semiconductors by China: Beijing, in fact, consumes almost half of the semiconductors produced globally, also because it is currently the most large consumer device assembly market.
Industrial applications and production processes
Semiconductors are useful to a wide range of industries, including consumer electronics, automotive, aerospace, telecommunications and many other technology sectors. Raw materials used to produce semiconductors include silicon, germanium, gallium arsenide, silicon carbide, and many other specialized materials. These materials are processed through a series of complex processes to create chips that power modern electronic devices.
The semiconductor manufacturing process, known as chip manufacturing, involves several key steps. Initially starts with a large-diameter silicon wafer, onto which several layers of materials are deposited through techniques such as chemical vapor deposition and physical vapor deposition. Subsequently, the various layers are patterned using photolithography and etching to define the electronic circuits and components. Finally, the wafer is cut into individual chips, which are then tested to ensure they work properly before being mounted in electronic devices.
China’s new semiconductor fund represents a major step forward in the country’s strategy to become a leader in advanced technologies. While results will take time, the investment demonstrates a strong commitment to build a robust domestic semiconductor capacity.
