A top Chinese semiconductor An industry executive predicted that China will see “explosive growth” in the next three to five years, supported by advantages in packaging applications and technologies, charting a path for the country to overcome US technological constraints.
Chen Nanxiang, president of the China Semiconductor Industry Association (CSIA) and head of China’s largest memory chip maker Yangtze Memory Technologies Corporation (YMTC) was quoted by Chinese state television as saying that the country is exploring a new market-oriented model for industry, while abandoning the old model of relying on universities and research academies.
“[Today’s focus] is in innovation in industry, products, services and business models, which will ultimately have to bring value,” Chen said in his interview with CGTN, the English channel of China Central Television (CCTV), which aired late “The chip industry in China has not yet achieved explosive growth, but that day will come in the next three to five years.”
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Semiconductors have been at the center of US-China tech war, which helped boost the development of the national industry, according to Chen. As the US seeks to deprive China of access to advanced chips and foundry technologies, Chen noted that advanced packaging could play an important role in the future.
“For example, the most advanced AI chips need cutting-edge foundry and packaging technologies,” he said. “It can be predicted that, in the very near future, the importance of packaging technology may exceed the importance of casting technology.”
Chen noted that there is a lack of consensus in chip development, highlighting differences in Samsung Electronics‘3 nanometer process compared to Intel.
He also suggested that he is placing his hope in the domestic industry in specialized chips, as chips are now often created for specific applications.
Chen did not mention YMTC in his interview as he spoke in his capacity as president of the industry association.
A cascade of US sanctions on China’s leading technology companies and semiconductor foundries, including YMTC, has led industry players to forge closer ties and lean on state support to find a way forward.
Chen called for industry unity in the face of US technology sanctions after being elected head of the CSIA last October. In June 2023, the president of the YMTC suggested that any toolmaker unable to deliver or service their equipment should buy back from customers.
Chen said that after making many mistakes in the past, China’s policymakers and industry players are still searching for the best way forward. A long period of trial and error has taught everyone which models are doomed to fail, she added.
Technological progress at YMTC and other Chinese foundries such as International Semiconductor Manufacturing Corporation is being closely monitored as a hallmark of China’s broader technological development as the US continues to periodically increase sanctions against the industry.
Chen stopped short of providing a clear answer to the question of whether China could fully catch up to the US in chipmaking. He suggested that a relaxation of “Moore’s Law” – the observation that the number of transistors on an integrated circuit doubles every two years – is beneficial to China because it helps foster innovation in other technologies, such as advanced packaging.
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