China Rallies Semiconductor Might, Targeting Global Market by 2030

China is pooling its semiconductor capabilities through a 'tripartite alliance' of government, business, and universities, setting its sights squarely on the global market by 2030. Chinese President Xi Jinping has emphasized the importance of basic research and original technologies, signaling China's determination for a semiconductor rise through government-industry-academia cooperation amidst U.S. sanctions.

Since 2014, the Chinese government has been creating 'Big Funds' under the 'National Integrated Circuit Industry Development Guidelines.' It is strengthening investment and policy support for semiconductor companies, including establishing a third fund worth 344 billion yuan in 2024, surpassing the combined scale of the first and second phases.

Local governments are also fully supporting the growth of domestic semiconductor firms with exceptional benefits. For instance, Wuhan City offers subsidies of up to 5 billion yuan and electricity fee reductions for resident companies, along with monthly subsidies of 3,000 yuan for new talent graduates. These efforts have led to achievements such as Yangtse Memory Technologies Corp. (YMTC) surpassing a 10% market share in the NAND flash market.

China is driving the expansion of its domestic supply chain through a policy mandating the adoption of over 50% domestic equipment for semiconductor fab (manufacturing facility) construction. It is also seeking to improve self-sufficiency by fostering equipment manufacturers like Cycad, spearheaded by technical experts from Huawei.

The government has been encouraging the cultivation of industry-academia integrated semiconductor companies since 2020. It is also actively nurturing talent and attracting overseas professionals by establishing new semiconductor graduate schools at Tsinghua University, Peking University, and other institutions.