Trendforce Analytical Company predicts a doubling of the production capacities of Chinese semiconductors in the next 5-7 years. This can lead to the oversaturation of the market and create difficulties for foreign manufacturers.
Despite the decrease in the import of semiconductors to China by 10.8% over the past year, Beijing is aimed at increasing domestic production in order to reduce dependence on foreign chips. Thus, Washington’s policy to limit China’s technological progress through trade restrictions in the future can wrap these efforts against the United States.
At the moment, 44 plants for the production of semiconductor plates are operating in China, of which 25 are produced by 12-inch plates, 15-8-inch, and another 4-6-inch. TrendForce reports on the construction of 22 more factories, 15 of which will produce 12-inch plates.
These new plants will be concentrated on the production of chips using outdated technological processes (usually 28 nm and above), which are still widely used in the production of chips for household appliances and automotive industries.
Analysts note that about 60% of the planned additional production potential may be launched in the next 3 years. Also, according to TrendForce forecasts, the share of China in global production capacity by outdated processes will increase from 29% to 33% by 2027. This can lead to an excess of semiconductors in the world market and the beginning of a price war.
In the future, manufacturers of semiconductors from other countries can reduce the oversaturation of the market and their own losses, abandoning the production of outdated chips and moving to more profitable products. However, this directly suggests that China will become a monopolist in the production of such chips.
Buyers will have no choice but the purchase of Chinese products, despite the existing fears about its security due to the country’s foreign policy. Richard Gordon, former Vice President of Gartner for semiconductors, also expressed his fear about dependence on Chinese suppliers in the face of instability of supplies.
The newspaper Global Times, which many consider the body of the