BEIJING – In the face of global chip shortages and U.S. sanctions, China’s Ministry of Industry and Information Technology on Monday refused to name targets for semiconductor production.
China would like to build self-sufficiency in competitive technologies and rely less on imports of semiconductors, or chips, which are used in products ranging from laptops to automobiles. The country had previously announced that, by 2020, it would like to produce 40% of the chips it uses and increase that proportion to 70% by 2025.
But when asked at a news conference on Monday about chip production targets, ministry spokesman Tian Yulong did not share specific figures. Instead, he exposed how the government was supporting the industry with measures such as tax cuts and talent development.
“The development of the semiconductor industry faces opportunities and challenges that require the world to strengthen cooperation and build the semiconductor industrial chain together, to enable it to develop in a healthier and more sustainable way,” said Tian, according to a CNBC translation of its Mandarin- language comments.
His comments were made at a time when the global chip shortage is forcing major car manufacturers to cut production. The delay in semiconductor manufacturing has grown due to high demand for electronics amid the coronavirus pandemic and a highly specialized global supply chain that has faced additional pressure from U.S.-China trade tensions that began under former President Donald Trump.
Last year, the Trump administration imposed restrictions on China’s largest chip maker, SMIC, which prevented it from buying cutting-edge equipment needed for production.
It is not yet clear what specific action US President Joe Biden will take. Last week, he signed an executive order to review supply chains in an effort to resolve the shortage.
Meanwhile, China’s ministry of industry and technology is trying to improve supply chain coordination in the country’s auto industry, where 90% of used chips are imported, according to a state media report Friday.
During Monday’s press conference, the head of the ministry, Xiao Yaqing, said that ensuring supply chain resilience is a priority.
“We must put the improvement of the stability and competitiveness of industrial chains and supply chains in a prominent position … and firmly take the initiative in the fiercely competitive international market,” said Xiao.
Across the country, data indicates that China did not reach its target of 40% domestic supply in 2020 amid the coronavirus pandemic.
Only 15.9% of the $ 143.4 billion in integrated circuits – another name for semiconductors – sold in China last year were produced in the country, according to American market research firm IC Insights.
China’s leaders are due to start an annual parliamentary meeting this week to determine national development goals for the next five years and beyond.
– CNBC’s Arjun Kharpal contributed to this report.