Semiconductor imports exceeding 160 billion U.S. dollars are still in early stages

China’s official Xinhua News Agency released a report on the 12th local time, saying that China’s annual spending on imported semiconductor equipment and raw materials exceeds US$160 billion, which exceeds China’s annual cost of importing crude oil products. It is worth mentioning that China has now become the world's largest consumer of semiconductor products.

Zou Xuecheng, director of Wuhan Integrated Circuit Design Engineering Technology Research Center in China, said in an interview with Xinhua News Agency that the lack of R&D capital investment is one of the key factors restricting the development of China's domestic semiconductor chip industry. Zou Xuecheng said that the royalty paid for using only foreign software is close to US$1 million, but he did not disclose whether the fee was paid in one lump sum or annually.

Most of the domestic semiconductor manufacturers in China are mainly engaged in the production of OEMs for other foreign manufacturers. Therefore, the products produced by domestic semiconductor chip manufacturers can only meet the demand of less than 10% of the Chinese market.

The Xinhua News Agency’s report emphasized that semiconductor chip makers located in Beijing, Shanghai, Wuhan and Xi’an have invested a certain amount of funds into the industry with the cooperation of local banks and the government. However, despite years of investment in R&D, China's domestic semiconductor chip production levels are still in the early stages of development. Xinhua also pointed out that there is still a big gap between SMIC Semiconductor Manufacturing Co., Ltd., which can basically represent the highest level of semiconductor manufacturing in China, and global giants (such as Intel, Samsung Electronics, and TSMC, etc.).