China Reiterates Self-Reliance in Advanced Science and Technology Including Semiconductors

Proclaiming the Development of Semiconductor and 5G Emerging Strategic Industries... Caution Against Redundant Overinvestment
Following Last Year's 5th Plenary Session, Commitment to Technological Self-Reliance Reaffirmed at This Year's Two Sessions

[Asia Economy Beijing=Special Correspondent Jo Young-shin] China has once again declared its commitment to technological self-reliance through the development of advanced scientific technologies such as semiconductors.

According to the Xinhua News Agency on the 9th, Xiao Yaqing, Minister of the Ministry of Industry and Information Technology of China, met with reporters at the Great Hall of the People in Beijing during the ongoing Two Sessions, stating that emerging strategic industries must be fostered as part of the high-quality development of the country's manufacturing sector, citing semiconductors and 5th generation mobile communications (5G) as representative fields.

However, Minister Xiao emphasized that investments in emerging strategic industries should not be scattered but must be carried out effectively.

He pointed out, "In the development process of new industries, blind duplicate investments must be avoided," and added, "We must pursue orderly development based on the principles of marketization and legalization."

China has made significant progress in various advanced technology fields such as 5G, cloud computing, artificial intelligence (AI), autonomous driving, unmanned aerial vehicles, and space development, but its semiconductor industry still lags far behind other advanced countries.

On the 5th, when the annual plenary session of the National People's Congress (NPC) opened, China revealed the draft of the '14th Five-Year Plan and Long-Term Goals through 2035,' which listed integrated circuits, meaning semiconductor products, as one of the seven key scientific research items, expressing its determination to focus on the development of the semiconductor industry in the mid to long term.

Minister Xiao's remarks expressing concern about disorderly duplicate investments in the semiconductor sector stem from the fact that many large-scale semiconductor investments in China have been disorderly and have often ended in failure.

Wuhan Hongxin Semiconductor Manufacturing Company (HSMC), which is currently heading toward liquidation, is cited as a representative case of poor semiconductor investment in China. Established in Wuhan in 2017 with the goal of producing system semiconductors using cutting-edge 7-nanometer (nm) or smaller fine processes, the company had a total investment of 128 billion yuan (approximately 22 trillion Korean won) either already invested or planned, but it collapsed due to funding issues without even properly constructing its factory buildings.

Tsinghua Unigroup, regarded as a symbol of China's semiconductor ambition, also failed to extend the maturity of 22 billion won worth of corporate bonds last year and is facing the risk of bankruptcy.

Premier Li Keqiang also announced in his work report on the 5th that R&D spending in advanced technology fields such as semiconductors will be increased by more than 7% annually.

Earlier, at the 5th Plenary Session of the 19th Central Committee of the Communist Party of China held last October, the Chinese leadership declared its intention to focus investments on advanced technology fields such as semiconductors, 5G, and quantum computers to achieve technological self-reliance.

This content was produced with the assistance of AI translation services.