On January 16, 2025, the China Semiconductor Industry Association issued a statement strongly supporting domestic and foreign-funded semiconductor companies operating in China to safeguard their legitimate rights and interests in accordance with WTO rules. The background of this statement is that the U.S. government announced through the "CHIPS and Science Act" that it will invest a huge amount of $280 billion to provide subsidies, loan guarantees and tax incentives to domestic semiconductor companies in the United States to vigorously support the expansion of domestic semiconductor manufacturing capacity in the United States. This policy has aroused widespread concern in the global semiconductor industry, especially in China and other market economy countries, resulting in serious instability and unbalanced competition. China Exportsemi will try to interpret the mystery behind it for you in many ways.
The global impact of U.S. policy
This move by the United States not only directly affects China's semiconductor industry, but also has a profound distortion and impact on the global semiconductor market. The United States provides large-scale financial subsidies to its own semiconductor companies, and this differentiated industrial policy violates the basic rules of the free market economy and significantly increases the uncertainty of the global semiconductor supply chain. According to an official statement from China's Ministry of Commerce, this move will exacerbate unfair competition in the global market, especially restricting fair competition between Chinese companies and American products, and even affecting the freedom of investment and trade of Chinese companies in the American market.
Such unilateralist protective measures not only cause disruption to the global semiconductor industry chain, but may also undermine the foundation of global industrial cooperation. Further, this policy may also lead to a reshuffle of the global industrial landscape, affect the stability of international trade, and may trigger retaliatory policies or trade frictions from other countries.
The response strategy of China's semiconductor industry
1. Rely on WTO rules to safeguard rights and interests
In the face of the strong policy of the United States, the China Semiconductor Industry Association has made it clear that it will resolutely defend the legitimate rights and interests of domestic and foreign-funded enterprises in China in accordance with laws and regulations and in accordance with the rules of the WTO. The WTO has always provided a platform for global enterprises to compete fairly, and China will actively fight for rights and interests on this platform to ensure the healthy development of the industry. The Chinese government's legal system and market supervision mechanism will ensure that domestic semiconductor companies are not harmed by unfair external competition.
2. Promote technological innovation and industrial upgrading
China's semiconductor industry has made remarkable progress in technological innovation in recent years, especially in the fields of third-generation semiconductor materials and 5G communication technology. The third generation of semiconductor materials has broad application prospects in the fields of new energy vehicles, photovoltaics, and high-voltage power transmission and transformation. For example, in 2021, the Chinese government approved the establishment of the "National Third-Generation Semiconductor Technology Innovation Center" to further promote the high-quality development of the industry.
In addition, Shenzhen Huixin Communication Technology Co., Ltd. has also achieved a breakthrough in the field of medium and high frequency devices for 5G communication, providing advanced technical support for upstream and downstream enterprises in the industrial chain. With the continuous development of these technologies, China's semiconductor industry has gradually occupied a place in the global technology competition.
Figure: Global semiconductor industry shocks: U.S. $280 billion subsidy policy and China's response strategy
3. Synergy and cooperation in the industrial chain
The vigorous development of China's semiconductor industry depends on the in-depth cooperation of the entire industry chain. In recent years, China has achieved remarkable results in the construction of integrated circuit industry clusters, and cities such as Shanghai, Beijing, and Shenzhen have formed mature semiconductor industry ecosystems. These clusters not only promote local production, but also strengthen cooperation between regions, especially in key areas such as chip design, manufacturing, packaging and testing.
For example, the Yangtze River Delta in Shanghai, the Beijing-Tianjin-Hebei region in Beijing, and the Pan-Pearl River Delta in Shenzhen have formed a complete semiconductor industry chain with design and manufacturing as the core. These industrial clusters not only enhance the self-sufficiency of the domestic market, but also lay the foundation for the expansion of Chinese enterprises in the global market.
4. International cooperation and market expansion
In the face of the pressure of international competition, China's semiconductor industry pays more attention to cooperation and exchanges with international counterparts. Through technical cooperation with international enterprises, China can not only introduce advanced technology, but also share business opportunities in the global semiconductor market and enhance the market competitiveness of local enterprises.
For example, Li Mengzhang, CTO of Akrostar, said that Chinese companies should be more open to international cooperation, not only to explore new technological directions, but also to carefully expand the scope of cooperation. This kind of cooperation is not only limited to the technical level, but also involves the sharing of capital, market and management experience, so as to help Chinese enterprises better adapt to the needs of the international market.
Future outlook: the recovery and competitive landscape of the global semiconductor industry
1. The global semiconductor market is recovering
In 2024, the global semiconductor market ushered in a signal of gradual recovery. According to the forecast of the World Semiconductor Trade Statistics Organization (WSTS), the global semiconductor market is expected to reach $611.2 billion in 2024, a year-on-year increase of 7%. Especially in the fields of automotive electronics, industrial automation and consumer electronics, demand continues to grow, bringing strong growth momentum to the entire industry.
The global semiconductor market is expected to grow further by 12.5% in 2025, with a total market value of nearly $687 billion. As one of the world's largest semiconductor markets, China's continuous expansion of domestic demand will become an important force to promote the growth of the global semiconductor industry.
2. Policy support and industrial ecological construction
The Chinese government will continue to provide policy support, especially in the areas of industrial chain coordination, technological innovation and talent training, to ensure that the semiconductor industry occupies a favorable position in global competition. The national large fund and special fund will provide stronger financial support for enterprises, and the introduction of anti-dumping and anti-subsidy policies will ensure the fair competition of domestic enterprises in the global market.
3. Talent and technological innovation
Talent is still the core element of China's semiconductor industry development. With the continuous expansion of industrial scale and continuous technological progress, more and more semiconductor professionals will devote themselves to this industry to promote technological innovation and industrial upgrading. China has made progress in attracting high-end overseas talent, providing a steady stream of innovation impetus for the semiconductor industry by optimizing talent policies and upgrading the education system.
In addition, industry experts such as Li Mengzhang and Wang Dongjie, relying on advanced technology accumulation and management experience, are contributing to the innovation and breakthrough of China's semiconductor industry, and promoting the industry to enter a more efficient and global stage of development.
Conclusion
China Exportsemi believes that the statement of the China Semiconductor Industry Association shows China's firm position in the global semiconductor industry competition, and says that it will actively strive for rights and interests within the framework of WTO rules. By increasing technological innovation, promoting industrial chain synergy and expanding international cooperation, China's semiconductor industry is expected to occupy a more favorable position in the future global competition. The policy support of the Chinese government and the optimization of the market environment also provide a solid guarantee for the sustainable development of the semiconductor industry. In the context of the recovery of the global semiconductor industry, Chinese enterprises will play an increasingly important role in the global market and contribute to the healthy development of the global semiconductor industry.
