China Aims to Bridge Gap in Chip Manufacturing Capacity with New Initiative

The initiative comes amidst an ongoing trade war with the US, which has imposed widespread restrictions on the exports of chips to China.

's Ministry for Industry and Information Technology (MIIT) has announced a new initiative to improve the country's manufacturing capabilities, particularly in the production of advanced semiconductor materials and automotive chips. The move comes in response to a report that highlighted the country's manufacturing abilities as less advanced than other nations.

Addressing Shortcomings in Core Industries

The MIIT's recently released “Opinions on Manufacturing Reliability Improvement” report outlines a plan to address the shortcomings of basic product reliability and enhance the quality of core components in three industries: machinery, electronics, and automotive. The report acknowledges that while Chinese manufacturing has seen improvements, there is still a significant gap between the reliability of the country's manufacturing industry and the advanced level of foreign countries.

US-Chinese Trade War

The initiative comes amidst an ongoing trade war with the US, which has imposed widespread restrictions on the exports of chips to China due to concerns over potential military modernization efforts and human rights abuses. These restrictions have also affected US businesses trading with non-US companies that export chips to China, causing friction and preventing semiconductor manufacturers such as ASML and Arm from selling to what was previously one of their largest markets.

China´s Two-Step Approach

The MIIT's plan proposes a “two-step” approach to improve manufacturing reliability. The first phase, set to be completed by 2025, focuses on strengthening the foundations and improving services. The aim is to establish over 100 typical demonstrations of reliability improvement and encourage over 1000 enterprises to implement reliability enhancement measures.

The second phase, set to be completed by 2030, focuses on setting benchmarks, strengthening driving forces, and promoting transformation. The goal is to bring the reliability level of 10 types of key core products to international advanced levels, cultivate a group of competitive and influential reliability public service institutions and reliability professionals, and promote the overall level of manufacturing reliability in China to a new level.

Focus on Key Industries

The MIIT's initiative particularly targets the machinery, electronics, and automotive industries due to their large industrial scale, high proportion of total industrial output, and strong radiation driving ability. The plan aims to improve the reliability of core basic components, core basic electronic components, key software, key basic materials, and basic processes to lay a solid foundation for the reliability improvement of related industry products.