China’s Chip Industry Running Faster, But Still Falling Behind

Beijing is determined to develop a leading edge semiconductor ecosystem. China’s recent Five Year Plan shows that the funding taps for Chinese firms pursuing chip-related projects will stay open for the foreseeable future, channeling hundreds of billions of dollars in their direction. Western competitors, however, are also poised to benefit from greater capital investments and government support. The latest evidence of this was the White House Chips Summit last week. This renewed commitment will move the goalposts for Chinese chip firms and the Chinese government more broadly.

While Chinese manufacturing firms can be expected to continue to advance in certain segments of the industry, we may look back on 2021 as the high-water mark of China’s competitiveness relative to western industry leaders in leading edge chip fabrication technologies. China is unlikely to wriggle free of its chip chokepoints anytime soon. In this note, we address the challenges China faces—both technical and commercial—in its drive for semiconductor self-sufficiency, and explore how Beijing’s policies and the chip shortage have reshaped industry dynamics and the geopolitics of semiconductors.

Posted April 20, 2021
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Five Things to Watch from China’s National People’s Congress

China’s National People’s Congress convenes next month and will feature the roll-out of the 14th Five-Year Plan. The policy signals sent by China come at a pivotal time. Amid economic headwinds at home and challenges abroad, Beijing will be seeking to shape the narrative around growth in 2021 and beyond, its push for technological self-reliance, and its pathway toward achieving ambitious new climate goals.

Posted February 26, 2021
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