A recent report by Chinese semiconductor industry research firm JW Consulting has revealed that more than CNY2.1 trillion (US$290.8 billion) has been allocated for semiconductor-related investment in China. The report covers 742 investment projects across 25 Chinese provinces and regions implemented between 2021 and 2022. Of this funding, one-third was dedicated to semiconductor equipment and materials.
These 742 projects encompass various semiconductor-related investments, including panel displays, wafer foundry, storage devices, integrated device manufacturing (IDM), device/chips, platform/base, semiconductor equipment, semiconductor materials, packaging, and testing.
The data shows that investment in the Chinese semiconductor industry has been increasing year on year. In 2021, there were 142 new projects and 187 ongoing projects. 2022, the number of new projects rose to 160, while the number of ongoing projects reached 352.
The provinces of Anhui and Guangdong experienced the most significant increase in semiconductor investment projects during this two-year period. Anhui initiated 304 new semiconductor investment projects, with a total investment of CNY425.6 billion, while Guangdong began 66 projects with an investment of CNY342.3 billion.
Due to geopolitical factors and the downturn of the chip market business cycle, the focus of China's semiconductor industry is gradually shifting upstream. Between 2021 and 2022, there were 176 semiconductor materials projects and 56 equipment projects, collectively accounting for over 30% of the total 742 projects.
In comparison, from 2016 to 2020, there were only 40 semiconductor material projects and 7 equipment projects, making up a total of 15.6%.
The report highlights that after a wave of bankruptcies and closures, China's semiconductor investment is now primarily concentrated on cluster development. The industry has moved from a period of blind enthusiasm to a more rational phase.
Chinese semiconductor investment has also shifted its focus from downstream end products to upstream equipment and material supply. The report mentions the presence of underlying technological innovations in the industry without providing specific details.
According to the report, local governments have been focusing on policy improvements that accelerate the growth of major semiconductor projects in each province. The industry has transitioned from individual efforts to a more collaborative approach, forming a reliable synergy among multiple forces.