The race for technology leadership in computer chips is entering a new round. In response to the US embargo on high-performance semiconductors, China wants to help the domestic industry with the equivalent of 136 billion euros, three people familiar with the case told Reuters news agency. Japan also wants to become less dependent on imports and plans to set up new production facilities.
The Chinese subsidy package would be the largest in five years. The insiders said it was mainly used to buy chip manufacturing equipment to modernize the domestic industry. Another goal is an impulse for research and development. The biggest beneficiaries of the program are Chinese chip suppliers such as Naura, Advanced Micro-Fabrication Equipment and Kingsemi. The information office of the Council of State was not immediately available for comment.
In Hong Kong, the prospect of government cash injections helped shares of semiconductor groups SMIC and Hua Hong rise 10% and as much as 17% respectively. For the latter, it was the largest daily profit in the company’s history. The Shanghai stock exchange had already closed when the Reuters report on the plans appeared.
Japanese forging alliance with IBM
China’s neighbor Japan also wants to become less dependent on the import of chips. That is why the state manufacturer Rapidus is entering into a partnership with the American technology giant IBM. The two companies want to set up a production facility for high-performance chips in the coming years. Initially, they gave no details about funding or the location of the factory. Rapidus is a joint project of technology companies such as Sony or NEC and the Japanese government.
At the same time, the Bloomberg news agency reported that the government in Tokyo, like the Netherlands, wanted to restrict the export of semiconductors and machines for their manufacture to China. In doing so, they would join a US initiative to limit the People’s Republic’s access to powerful chips for applications such as artificial intelligence. Japan and the Netherlands are home to two major chip suppliers, Tokyo Electron and ASML.
Asked about the report, Japanese Commerce Minister Yasutoshi Nishimura said export control cooperation played a role in a phone call with US Commerce Secretary Gina Raimondo. But he declined to go into details. The Dutch Ministry of Foreign Affairs declined to comment on the matter. According to previous statements from the Commerce Department, the country is in exchange with the US over export restrictions to China. Since 2018, the Netherlands has banned ASML from exporting the latest generation of chip production systems to China. The reason for this is the possible military use of the semiconductors produced with it.
The US and the EU are also investing billions
Parallel to the export ban, the US put together an investment package worth $ 52 billion (49.23 billion euros) to promote chip production in its own country. In Japan, Rapidus boss Atsuyoshi Koike estimated the costs incurred as part of the collaboration between his company and IBM to be the equivalent of several billion euros. The EU is also entering this race and created the “European Chips Act” worth 15 billion euros. Partly thanks to this help, huge new semiconductor factories are being built in Magdeburg and Dresden.
Source: Krone
I’m Ben Stock, a journalist and author at Today Times Live. I specialize in economic news and have been working in the news industry for over five years. My experience spans from local journalism to international business reporting. In my career I’ve had the opportunity to interview some of the world’s leading economists and financial experts, giving me an insight into global trends that is unique among journalists.
