CEO of chip maker YMTC says China to see 'explosive' semiconductor growth in 3-5 years
A top Chinese semiconductor industry executive has predicted that China will see "explosive growth" in the next three to five years on the back of advantages in applications and packaging technologies, drawing a path for the country to overcome US technology restrictions.
Chen Nanxiang, the chairman of the China Semiconductor Industry Association (CSIA) and head of China's top memory chip maker Yangtze Memory Technologies Corporation (YMTC) was quoted by Chinese state television as saying the country is exploring a new market-driven model for the industry, while ditching the old model of relying on universities and research academies.
"[Today's focus] is on innovation in industry, products, services, and business models, which ultimately will have to bring value," Chen said in his interview with CGTN, the English channel of China Central Television (CCTV), which aired over the weekend. "The chip industry in China has not yet reached explosive growth, but that day will come over the next three to five years."
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Semiconductors have been at the centre of the US-China tech war, which has helped fuel the domestic industry's development, according to Chen. While the US is trying to deprive China's access to advanced chips and foundry technologies, Chen noted that advanced packaging could play an important role in the future.
"For example, the hottest AI chips are in need of state-of-the-art foundry and packaging technologies," he said. "It can be predicted that, in the very near future, the importance of packaging technology may exceed the importance of foundry technology."
Chen noted that there is a lack of consensus in chip development, highlighting the differences in Samsung Electronics' 3-nanometre process compared with Intel's.
He also suggested he is pinning his hope for the domestic industry on specialised chips, as chips are now often created for specific applications.
Chen did not mention YMTC in his interview, as he speaking in his capacity as chairman of the industry association.
A cascade of US sanctions on China's top technology companies and semiconductor foundries, including YMTC, have prompted industry players to form closer ties and rally behind state support to find a way forward.
Chen has called for industry unity in the face of US tech sanctions after being elected head of the CSIA last October. In June 2023, the YMTC chairman suggested that any tool maker unable to deliver or service their equipment should buy it back from customers.
Chen said after making many mistakes in the past, China's policymakers and industry players are still in search of the best way forward. A long period of trial and error has taught everyone which models are doomed to fail, he added.
Technological progress at YMTC and other Chinese foundries such as Semiconductor Manufacturing International Corporation is being closely monitored as a hallmark of China's broader tech development, as the US has continued to periodically escalate sanctions targeting the industry.
Chen stopped short of providing a clear answer to the question of whether China could completely catch up with the US in chip making. He suggested that a slowing of "Moore's Law" - the observation that the number of transistors in an integrated circuit doubles about every two years - is beneficial for China because it helps fuel innovation in other technologies such as advanced packaging.
This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2024 South China Morning Post Publishers Ltd. All rights reserved.
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