"US Sanctions Actually Spur Growth of China's Semiconductor Industry"

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Jeong Hyunjin] As the United States imposed various sanctions to hinder China's semiconductor rise, an analysis has emerged that China's semiconductor industry's growth has actually accelerated.

On the 21st, Bloomberg reported that when examining the average revenue growth rate of global semiconductor companies over the past four quarters, 19 out of the top 20 were Chinese companies. Considering that there were 8 Chinese semiconductor companies during the same period last year, this represents more than a twofold increase.

The company with the largest growth during this period was the fabless company 'C*Core' based in Suzhou, China, whose revenue increased by 338.0% over the recent four quarters. Following were China's AI semiconductor unicorn 'Cambricon' and fabless 'Triductor Technology,' recording 144% and 136% respectively. In Cambricon's case, its stock price has more than doubled from this year's lowest point, and experts see potential for further growth.

Bloomberg analyzed, "U.S. sanctions on regional champions from Huawei to Hikvision have stimulated China's desire for domestic components, making China's semiconductor industry the fastest growing worldwide." The U.S. measures to restrict technology sales to Chinese companies such as SMIC and Hikvision since 2020, intended to curb China's semiconductor industry growth, have instead become a driving force for China to develop its domestic companies more rapidly.

Felix Li, an analyst at global fund rating firm Morningstar, told Bloomberg, "The biggest core trend started with the exploration of self-sufficiency in supply chains triggered by COVID-19 lockdowns," adding, "During the lockdowns, Chinese customers who had been importing semiconductors from overseas had to supply alternatives domestically to ensure smooth business operations."

He stated that Chinese companies' aggressive expansion of production capacity, despite concerns about long-term profitability, will enhance their presence in the global market, adding, "There is no doubt that Chinese semiconductor companies will be able to increase their sales in the automotive, home appliance, and other device markets over the coming years."

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