Tech war: SMIC, Huawei projects among top government-supported endeavours in 2024

Tech war: SMIC, Huawei projects among top government-supported endeavours in 2024

Tech war: SMIC, Huawei projects among top government-supported endeavours in 2024

Semiconductor Manufacturing International Corp (SMIC) and Huawei Technologies, two key players in Beijing’s efforts to defeat US sanctions on advanced chips, are among the country’s top recipients of local government funding this year, according to published government documents.

In Shanghai, 16 out of 191 major projects that have local government subsidies are related to the semiconductor industry, according to data released by the city authorities. China’s top chip maker SMIC had two 300mm production lines, both currently under construction, on the list, while a Huawei research centre in Shanghai’s Qingpu district is also among the 16 projects.

The Huawei facility in Qingpu is focused on research and development in semiconductors, wireless networks and Internet of Things, with plans to hire 35,000 researchers after it opens in June 2024. Other projects that have received Shanghai funding include a production facility by China’s etching equipment firm Advanced Micro-Fabrication Equipment.

China’s SMIC amasses chip-making tools with spending bump as US escalates curbs

Huawei and SMIC have been blacklisted by Washington for national security reasons, denying them access to foreign semiconductor technologies without US approval. However, last year Huawei surprised the global chip industry with a 7-nanometre smartphone chip that was made by SMIC using an older generation of lithography system from Dutch firm ASML.

Separately, the provincial government of Anhui said in an investment directive published on Sunday that it will give more support to achieving technology breakthroughs in the dynamic random access memory (DRAM) field this year, an area where China is playing catch-up with global leaders such as Samsung Electronics, SK Hynix and Micron Technology.

Hefei, capital of China’s eastern Anhui province, is home to top DRAM maker ChangXin Memory Technologies, which produced the country’s first lower power double data rate 5 (LPDDR5) DRAM chip, narrowing the gap with leading foreign players.

China’s leading semiconductor companies have been heavily supported by government grants in recent years, especially after the US targeted the sector over concerns it could help modernise the Chinese military. In 2022, the Chinese government doled out more than 12.1 billion yuan (US$1.75 billion) in subsidies to 190 domestically listed semiconductor companies. SMIC was the largest subsidy recipient that year, receiving 1.95 billion yuan.

Dutch chip tool giant ASML warns of ongoing risks of US-China tensions

Huawei, which regained the No 1 spot in China’s smartphone market at the start of this year, has received an estimated US$30 billion in government funding to help build domestic chip-making facilities, according to a Bloomberg report citing sources.

After a year-long slump in the global chip industry, SMIC earlier this month reported its capital expenditure for 2024 would be US$7.47 billion, the same level as the previous year.

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