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Chinese companies look outside U.S. for semiconductor technology

  • September 13, 2020
  • , Nikkei , p. 7
  • JMH Translation

By Cheng Ting-Fang, Lauly Li, Takashi Kawakami, and Hideaki Ryugen

 

As the U.S. increases its controls on Chinese technology firms, Semiconductor Manufacturing International Corporation (SMIC), China’s leading semiconductor manufacturer, is rushing to build a production system that does not rely on U.S. technology. SMIC will increase its use of devices made in China and make efforts to incorporate technology from countries other than the U.S. Although it may take some time for China to develop cutting-edge semiconductors, the conflict between the U.S. and China is spurring the development of a Chinese semiconductor industry independent of the U.S.

 

In addition to increasing their use of products made with Chinese technology, Chinese semiconductor companies are making efforts to procure products from device manufacturers outside the U.S. Japan’s Zuken, an industry leader in the software used to design printed circuit boards, has seen an increase in inquiries from Chinese companies.

 

There are risks for Japanese and European device manufacturers to conduct business with China because it is contrary to the U.S.’s wishes. Nikon, which manufacturers lithography devices to print circuit patterns onto semiconductors, says that it is increasingly “approaching customers that have plans to invest in China but is carefully watching the political situation.” The company will proceed cautiously, monitoring U.S. sanctions on China.

 

China is expected to beef up its own semiconductor industry in the long term, while relying on non-U.S. companies for the technologies it lacks. The Chinese government announced in August 2020 that it will cut or eliminate corporate taxes on semiconductor manufacturers for up to ten years. It looks like the conflict between the U.S. and China may become an impetus for China to enhance the speed and scale of its efforts to develop its domestic semiconductor industry. (Abridged)

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