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Shanghai to start producing high-performance IC chips by yearend
One of Shanghai’s integrated circuit (IC) chip production lines boasting an investment of 38.7 billion yuan is expected to be capable of producing 40,000 chips every month for China’s high-end manufacturing sectors ranging from communication to artificial intelligence by 2022, reported the Liberation Daily, a local newspaper published by the Shanghai municipal government.

Being the city’s biggest project in the IC industry by investment amount, the Huahong No. 6 Factory was built by the Shanghai Huahong Group, a state-owned conglomerate known as the leader of China’s IC industry. With the first processing equipment—an etching machine being moved into the factory on Monday, the factory has finished construction one month ahead of schedule and is now on the device debugging phase.

The southern district of Pudong’s Kangqiao Industrial Park, where the new factory is situated, is designed to be built into a base for developing IC industry and technology, according to the Liberation Daily.

The lithography machine first put in place was shipped by ASML, Europe’s biggest maker of semiconductor equipment. It’s reported that all the other processing devices would move in during the next five months. The facility will begin a trial run by the end of the year with a monthly production of 10,000 chips, while by the end of 2022, the capacity will reach 40,000 chips per month.

The two indicators of IC technology development are respectively “interconnection system” and “microfabrication”. The new “Huali 12-inch IC production line on 28-14 nanometer process technology” would not only manufacture chips of higher performance but with higher productivity compared with all the other operational factories.

“The Chinese mainland is now crippled by low productivity in IC manufacturing using 28 nanometer process. Once the new production line is put in operation, the current capacity would be doubled. By then, part of high-performance chips used in our manufacturing would be made-in-China products, which is of big significance to our semiconductor industry,” Lei Haibo, chairman of hanghai Huali Microelectronics Corporation, told the Liberation Daily.

The production line will make the state-owned Huahong Group one of the top players in the IC industry globally, according to the report, which also noted the project is included in the country’s 13th Five-Year Plan for the IC sector.

The new factory built under the country’s industrial policies is believed to be what’s most needed for the country to develop high-end manufacturing, although amid the ongoing China-US trade disputes, the policies have been seriously challenged by the Trump administration.

During the Beijing trade talks a month ago between Liu He, Chinese President Xi Jinping’s top economic advisor and Steven Mnuchin, the US Treasury Secretary, it was made clear by the US side that China must curtail support for high-tech industries.

However, according to analysts, stopping support for the country’s high-tech sector would not be a good choice for China, as indicated in the high-profile ZTE case.

In mid-April, the US government imposed an export ban on ZTE Corp, a state-owned telecom gear and smartphone maker, prompting concerns that China’s burgeoning high-tech sector may become a target of the US government.

ZTE Corp later announced to have suspended all its main operations citing the ban as the main reason, highlighting the dependence of China’s electronics industry on the US-made chips.

“The bilateral trade frictions reminded us of the real gap in manufacturing and technological sectors between China and Western powers, which further justifies our Made In China 2025 initiative,” said Ma Guangyuan, a veteran economic commentator with CCTV, China’s national broadcaster.  


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