China will strengthen supervision of new entrants into its “chaotic” semiconductor industry following a number of high-profile collapses during Beijing’s push to reduce its reliance on imports by boosting investment in home-grown computer chip development and manufacturing.
Meng Wei, a spokeswoman with the National Development and Reform Commission (NDRC), said that some companies “with insufficient knowledge of integrated circuit development” have “blindly entered into projects”.
Some domestic players in China’s semiconductor industry have wasted resources as the central government has splashed out billions in the industry to create national champions
“The risks of low-level construction have appeared repeatedly, and there has even been stalled construction of individual projects and vacant factories, resulting in a waste of resources,” Meng said on Tuesday at a regular press briefing of the economic planning agency.
She added that the NDRC “also noticed that the enthusiasm for domestic investment in the integrated circuit industry is constantly rising”.
According to estimates from Shanghai-based private equity firm Winsoul Capital, investment in the Chinese semiconductor industry totalled 60 billion yuan (US$9 billion) in the first seven months of this year, more than double the investment amount in the same period last year.
However, while investment is rising in computer chip manufacturing, the industry has seen a number of failures, raising questions as to how much of the funding already granted is being wasted.