Amidst US and European containment measures, China has impressively doubled its semiconductor equipment localization rate to over 40% in just two years. This leap has been particularly noted in equipment for PVD and oxidation, exceeding 50%. Companies like Advanced Micro-Fabrication Equipment Inc. China and Naura Technology have invested heavily in R&D, with ratios exceeding 10%.<\/p>\n\n\n\n
This rapid growth in self-reliance can be attributed to China’s extensive domestic market, government support, strong R&D capabilities, and the backing of the capital market. Despite this progress, China continues to lean on foreign technology for lithography processes, constituting a significant portion of semiconductor fabrication time and cost.<\/p>\n\n\n\n
Only ten years ago, China’s semiconductor industry was highly dependent on foreign equipment and technology, with the country’s localization ratio of semiconductor equipment at a mere 21%<\/a> in 2022. Fast forward to 2023, and China’s self-sufficiency in semiconductor manufacturing has soared to over 40%<\/a>. The catalyst for this shift to self-reliance can be traced back to several key factors: a vast domestic market, robust government support, impressive R&D capabilities, and substantial backing from the capital market.<\/p>\n\n\n\n One of the most striking illustrations of this increased self-sufficiency is the localization rate of equipment for Physical Vapor Deposition (PVD) and oxidation processes, which has surpassed 50%. Semiconductor equipment manufacturers have also consistently invested more than 10% of their revenues in R&D, which is higher than most foundries and chip equipment manufacturers, demonstrating a clear commitment to innovation and self-reliance.<\/p>\n\n\n\n Despite this impressive progress, China still confronts a considerable challenge in the form of lithography – an essential process in semiconductor manufacturing, which accounts for approximately 60% of the time and around 35% of the cost of semiconductor fabrication. Currently, the localization rate of lithography equipment languishes in the single digits.<\/p>\n\n\n\n However, there are signs of change on the horizon. For instance, Shanghai Micro Electronics Equipment Group (SMEE) plans<\/a> to introduce its first scanner capable of producing chips on a 28nm process technology by the end of 2023. This development could potentially enhance China’s lithography self-sufficiency, bringing it closer to achieving a fully localized semiconductor supply chain.<\/p>\n\n\n\n China’s move towards semiconductor localization has far-reaching implications for the country and the global supply chain and market dynamics. With governments increasingly investing in<\/a> strengthening their local semiconductor ecosystems, China’s aggressive push towards self-sufficiency could disrupt the existing balance of power within the global semiconductor industry.<\/p>\n\n\n\n Moreover, the China-U.S. rivalry over digital technology, with semiconductors at its heart, is becoming the primary force<\/a> in international politics. As such, China’s progress in semiconductor localization could have important implications for its international relations, particularly with the U.S.<\/p>\n\n\n\n By 2030, the global semiconductor market is projected to reach $1.1 trillion, and if current trends continue, China could account for a significant portion of this market. However, the semiconductor self-sufficiency race could hinder the industry’s progress toward this $1 trillion goal. Nevertheless, if China continues to navigate these challenges and opportunities with the same vigor and determination it has demonstrated so far, its semiconductor industry’s future looks promising.<\/p>\n","protected":false},"excerpt":{"rendered":" Amidst US and European containment measures, China has impressively doubled its semiconductor equipment localization rate to over 40% in just two years. This leap has been particularly noted in equipment for PVD and oxidation, exceeding 50%. Companies like Advanced Micro-Fabrication Equipment Inc. China and Naura Technology have invested heavily in R&D, with ratios exceeding 10%. […]<\/p>\n","protected":false},"author":2580,"featured_media":494344,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"advgb_blocks_editor_width":"","advgb_blocks_columns_visual_guide":"","footnotes":""},"categories":[8553],"tags":[8098,72896,58593],"location":[6763],"article_type":[60595],"serie":[],"archives":[],"internal_archives":[],"reboot-archive":[],"class_list":["post-460262","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-digital","tag-china-en","tag-chips-2","tag-semiconductor-industry","location-netherlands","article_type-analysis"],"blocksy_meta":[],"acf":{"subtitle":"The semiconductor self-sufficiency race could hinder the industry's progress toward a $1 trillion market goal, experts think.","text_display_homepage":false},"author_meta":{"display_name":"Laio","author_link":"https:\/\/ioplus.nl\/archive\/author\/laio\/"},"featured_img":"https:\/\/ioplus.nl\/archive\/wp-content\/uploads\/2023\/09\/brewbart_a_chinese_chip_manufacturer_gaining_weight_amidst_the_332c73a6-b333-429e-b05e-547fbe36ddfb.png","coauthors":[],"tax_additional":{"categories":{"linked":["Digital<\/a>"],"unlinked":["Digital<\/span>"]},"tags":{"linked":["china<\/a>","chips<\/a>","semiconductor industry<\/a>"],"unlinked":["china<\/span>","chips<\/span>","semiconductor industry<\/span>"]}},"comment_count":"0","relative_dates":{"created":"Posted 3 years ago","modified":"Updated 3 years ago"},"absolute_dates":{"created":"Posted on October 4, 2023","modified":"Updated on October 4, 2023"},"absolute_dates_time":{"created":"Posted on October 4, 2023 2:58 pm","modified":"Updated on October 4, 2023 2:58 pm"},"featured_img_caption":"","series_order":"","_links":{"self":[{"href":"https:\/\/ioplus.nl\/archive\/wp-json\/wp\/v2\/posts\/460262","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/ioplus.nl\/archive\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/ioplus.nl\/archive\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/ioplus.nl\/archive\/wp-json\/wp\/v2\/users\/2580"}],"replies":[{"embeddable":true,"href":"https:\/\/ioplus.nl\/archive\/wp-json\/wp\/v2\/comments?post=460262"}],"version-history":[{"count":0,"href":"https:\/\/ioplus.nl\/archive\/wp-json\/wp\/v2\/posts\/460262\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/ioplus.nl\/archive\/wp-json\/wp\/v2\/media\/494344"}],"wp:attachment":[{"href":"https:\/\/ioplus.nl\/archive\/wp-json\/wp\/v2\/media?parent=460262"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/ioplus.nl\/archive\/wp-json\/wp\/v2\/categories?post=460262"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/ioplus.nl\/archive\/wp-json\/wp\/v2\/tags?post=460262"},{"taxonomy":"location","embeddable":true,"href":"https:\/\/ioplus.nl\/archive\/wp-json\/wp\/v2\/location?post=460262"},{"taxonomy":"article_type","embeddable":true,"href":"https:\/\/ioplus.nl\/archive\/wp-json\/wp\/v2\/article_type?post=460262"},{"taxonomy":"serie","embeddable":true,"href":"https:\/\/ioplus.nl\/archive\/wp-json\/wp\/v2\/serie?post=460262"},{"taxonomy":"archives","embeddable":true,"href":"https:\/\/ioplus.nl\/archive\/wp-json\/wp\/v2\/archives?post=460262"},{"taxonomy":"internal_archives","embeddable":true,"href":"https:\/\/ioplus.nl\/archive\/wp-json\/wp\/v2\/internal_archives?post=460262"},{"taxonomy":"reboot-archive","embeddable":true,"href":"https:\/\/ioplus.nl\/archive\/wp-json\/wp\/v2\/reboot-archive?post=460262"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}Challenges and Opportunities<\/h2>\n\n\n\n
Global Impact<\/h2>\n\n\n\n
The Path Forward<\/h2>\n\n\n\n