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China Has Made a Record 140 Billion Chips So Far This Year

SMIC
(Image credit: SMIC)

China has largely been the number one consumer of semiconductors, and now it's making more than ever. It hit an all-time monthly high in May, according to data released by the Chinese government yesterday.

In May, 2021, various companies in China produced 29.9 billion chips, up 37.6% from the same month a year ago. In April, the country manufactured 28.7 billion chips and in March it made 29.1 billion of chips. In total, 139.9 billion integrated circuits (IC) were produced in China this year so far, an increase of 48.3% compared to the first five months of 2020, reports South China Morning Post, citing the National Bureau of Statistics. 

While it is evident that the Chinese semiconductor industry is developing and growing rather fast, counting the number of ICs may not be an ideal metric of its performance. The number of chips reported by the Chinese government includes memory chips as well as various processors for automobiles, home appliances, smartphones, and other devices. In fact, a significant share of chips made in China are manufactured by companies like Intel, Samsung, and SK Hynix that produce 3D NAND in the country. 

There are big local producers of logic chips in China as well. While companies like Semiconductor Manufacturing International Corp. (SMIC) and Hua Hong cannot produce chips using advanced process technologies, most chips that are in use today are made using 28nm and thicker fabrication processes, so foundries can support Chinese automotive and consumer electronics industries with these chips. 

Even with sizable foundries and local makers of memory, China is far from being self-sufficient as far as chip supply is concerned. In the first five months of this year the country imported 260.35 billion ICs, a 30% increase over the same period last year.  

Huawei, SMIC and a number of other large chip designers and producers from China are blacklisted by the U.S. government, which greatly slowdowns their R&D efforts and essentially prohibits them from buying new equipment for their fabs. As a result, China will have to rely on chip imports for years to come, especially complex chips such as microprocessors.

  • escksu
    This trade war will be one of USA's biggest mistake. They will eventually become self-sufficient and USA and other countries will lose China as customer.

    You won't be able to find another country that could even match China's manufacturing capabilities and cost. Look at countries like India and Vietnam. They lack the necessary infrastructure and labour and cost is not really lower as well. For countries like Europe and USA, the cost is way too high.
    Reply
  • Geef
    Their number might be a bit different if you count Taiwan as a different country than China, which it is. China does everything it can to say thats not the case. People get money from them to NOT talk about Taiwan.
    Reply
  • VforV
    escksu said:
    This trade war will be one of USA's biggest mistake. They will eventually become self-sufficient and USA and other countries will lose China as customer.

    You won't be able to find another country that could even match China's manufacturing capabilities and cost. Look at countries like India and Vietnam. They lack the necessary infrastructure and labour and cost is not really lower as well. For countries like Europe and USA, the cost is way too high.
    There still are so many people that are in denial when it comes to China, they can't fathom the idea that china can't be stopped...
    Reply