China's semiconductor production capacity is expected to increase by 40% within 5 years

According to market research firm TechInsights, China's semiconductor production capacity is expected to increase by 38.7% from 631msi (million square inches) this year and reach 875msi by 2029. China has long defined semiconductors as a strategic industry and is cultivating it, with related enterprise expenditures skyrocketing from $11 billion in 2018 to nearly $30 billion in 2023. The explosive growth in equipment procurement in the past few years is transforming into a rapid increase in production capacity. In fact, the annual semiconductor production capacity is expected to increase by more than twice compared to 2018 this year. This is the result of proactive investment in chip manufacturing equipment.

China is working hard to build its own semiconductor supply chain in response to US sanctions. Relevant analysis suggests that the investment may be used internally in China and increase new production capacity, which will also have a significant impact on world semiconductor prices. (Translated by Zhang Huaxin)

On June 10th, the Australian website "Pearl and Stimulus" published an article titled "The tenacious vitality of Chinese semiconductors". The author once discussed how the field of artificial intelligence chips has become a key battlefield for competition between the United States and China. The latest report from the evaluation media "Tom Hardware" provides valuable insights for us to understand the development speed of China.

People in Washington are not yet aware of China's rapid progress in semiconductor technology, especially the leap from 7nm to 3nm chips, which represents a significant technological breakthrough. This progress poses a challenge to the West, which traditionally holds a leading position in the field of cutting-edge semiconductor technology. Despite facing Western sanctions and increasing restrictions on Asma lithography machines, Chinese technology companies still demonstrate sustained innovation capabilities.

Faced with Western suppression, China has utilized the experience and skills of photovoltaic panel manufacturers, and with unparalleled industrial and scientific support, has broken through obstacles in technology. The United States continues to introduce sanctions in an attempt to restrict China's access to advanced semiconductor technology and equipment, especially extreme ultraviolet lithography machines. Looking back now, it seems that China has preemptively avoided the relevant issues through clever decision-making.

The semiconductor industry has been included in the 14th Five Year Plan, and China has clearly set the goal of achieving independent core technologies. The relevant policies include a large amount of research and development investment, with a focus on key technologies such as integrated circuits and advanced materials, and promoting innovation through close cooperation between the industry, academia, and government. China's strategic measures aim to comprehensively enhance its domestic semiconductor industry, ensure its position in the global production chain, and ensure China's resilience and technological sovereignty under geopolitical constraints. It is not surprising that companies like SMIC are likely to closely cooperate with domestic semiconductor equipment manufacturers to increase the production of advanced products. Ultimately, such cooperation enables China to produce more advanced chips using old equipment under US sanctions. In addition, China is exploring alternative technological processes to promote the continued development of semiconductor manufacturing. By investing heavily in domestic research and development, collaborating with local equipment manufacturers, and exploring alternative technologies, Chinese enterprises have successfully resolved many challenges brought about by US export controls.

The progress of chip manufacturing technology and the strategic measures taken by China highlight the dynamic and rapid development of this industry. China's achievements in this field highlight a significant shift in the technological landscape. Faced with US sanctions, the resilience and innovation capabilities demonstrated by Chinese enterprises once again highlight China's strategic policy priorities and determination to achieve the core focus of "technological sovereignty". With China's continuous progress in semiconductor manufacturing, the global balance of power in areas such as technology governance will undergo profound changes.