Tech war: dreams die for bankrupt Chinese semiconductor start-up Woodson

The recent collapse of Woodson, a Shanghai-based semiconductor start-up that went bankrupt, is the latest example of how China's efforts to build local alternatives to the world's most advanced chips can fail.

Woodson, whose main entity is Shanghai Wusheng Semiconductor Group, was liquidated, according to a notice released on June 6 by the city's Pudong New Area People's Court.

That marked the end for the firm, which was once an emerging star in China's semiconductor industry.

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The company's failure showed the difficulties for some Chinese semiconductor start-ups to manoeuvre around US restrictions, which bar mainland enterprises from accessing American-origin technologies from anywhere and even US investments, amid heightened tensions between Washington and Beijing.

The landing page of Shanghai Wusheng Semiconductor Group's website. Photo: SCMP alt=The landing page of Shanghai Wusheng Semiconductor Group's website. Photo: SCMP>

Formed in 2019, Woodson started operations with a registered capital of 10 billion yuan (US$1.4 billion), announced two projects with a total funding of US$5.5 billion, and actively recruited former executives from Samsung Electronics and Taiwan Semiconductor Manufacturing Co (TSMC).

Established at a time when the tech war between Washington and Beijing started to heat up, Woodson was focused on manufacturing integrated circuits for LCD/OLED display drivers, flash memory chips and contact image sensors for cameras.

The company at the time touted that its team had "multiple core experts with an experience of more than 20 years".

In 2020, Woodson's Hong Kong-registered shareholder China Semiconductor, a private company, signed a deal with the Economic and Technological Development Zone of Nanjing, capital of Jiangsu province, for a US$3-billion plant to make 40,000 12-inch wafers each month, according to a report by the government-run Nanjing Daily, which has removed the article online.

Another project announced in April 2021 said Woodson was also planning to build a research, development and manufacturing complex worth about 18 billion yuan that was to be completed in five years.

Four months later, several Chinese media reported that Samsung global executive vice-president Zhang Duanduan, the South Korean company's first foreign high-level female manager, would join Woodson. Jowei Dun, former TSMC engineering department manager was also supposed to join, according to a report by Chinese media The Paper, which cited an unnamed source.

Zhang could not be reached for comment. Dun, whose LinkedIn account did no contain anything related to Woodson, did not immediately respond to a request for comment on Wednesday.

Hit by a cash crunch, Woodson was subsequently sued by clients and suppliers over the past few years, according to data from company registry Qichacha.

Woodson founder and legal representative Zhang Jialiang was blacklisted as a debtor in 2022, which led to restrictions on luxury spending.

The company's steady demise showed that it failed to receive fresh government subsidies to keep its operations going. Its plant in Nanjing, for example, was to receive subsidies only when certain requirements were met, such as its equipment yield rate reaching 98 per cent, according to The Paper, citing the unnamed source.

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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