Shenzhen wants to double semiconductor output by 2025 under new plan to boost tech industry
- Shanghai-based Semiconductor Manufacturing International Corp, China’s biggest chip maker, is currently building a new wafer fabrication plant in Shenzhen
- In April, China’s chip output dropped to a two-year low, declining 12.1 per cent year on year to 25.9 billion units
China’s southern tech hub of Shenzhen wants to double the value of its existing chip sector within three years as part of a broader push to improve the country’s self-sufficiency in core technologies.
Shenzhen, known as China’s Silicon Valley, announced a plan to build “an influential cluster” for the semiconductor industry by 2025, including the development of leading national capabilities in manufacturing, packaging and testing of chips.
By 2025, Shenzhen aims to develop a semiconductor industry that can bring in 250 billion yuan (US$37.5 billion) in annual sales, compared to the 110 billion yuan in revenue last year, according to an action plan jointly issued on Monday by the Shenzhen Development and Reform Commission and other local authorities.
The city aims to cultivate at least three integrated circuit design firms with annual sales of more than 10 billion yuan each, and three chip makers with 2 billion yuan revenue each.
Although Shenzhen is home to some of China’s biggest tech firms, including social media titan Tencent Holdings, telecoms giant Huawei Technologies Co, and drone leader DJI, it lags behind Shanghai and Beijing when it comes to semiconductor design and production.
Xie Ruifeng, general manager of semiconductor research firm ICwise, said Shenzhen’s goals, including its 250 billion yuan sales target, were “achievable but will take a lot of effort”.
“Shenzhen has a few advantages in developing the semiconductor industry, including its proximity to downstream applications, rich resources for innovation, solid government funding and an active private capital market,” Xie said. “However, the city is still lacking in local wafer fabrication capabilities, which will be a main focus for Shenzhen’s efforts.”
Shanghai-based Semiconductor Manufacturing International Corp, China’s biggest chip maker, is currently building a new wafer fabrication plant in Shenzhen, which is expected to be completed this year.