China's chip industry has grown faster after U.S. sanctions

According to media reports on the 21st, after the US government imposed a series of restrictions on some leading Chinese chip industry companies such as Huawei in recent years, China's chip industry has grown faster than anywhere else in the world.

Screenshot of Bloomberg report

Data compiled by Bloomberg show that, on average, 19 of the world's 20 fastest-growing chip companies in each of the past four quarters came from China, compared with eight in the same period last year. According to the report, the revenue growth rate of these Chinese chip industry companies is several times that of world-renowned semiconductor companies such as ASML.

According to Bloomberg, the semiconductor industry plays a huge role in future technologies such as defense, artificial intelligence, and self-driving cars. The meteoric growth of companies in the Chinese chip industry underscores how tensions between Washington and Beijing are affecting the global semiconductor industry. The U.S. began restricting sales of U.S. technology to Chinese companies such as Semiconductor Manufacturing International Corporation and Hikvision in 2020 in an attempt to curb their growth, but it has also fueled a boom in Chinese chip manufacturing and supply, the report said.

Data map of SMIC's headquarters in Shanghai, Bloomberg reports with map

Shares of Chinese companies such as Cambrian Technologies have more than doubled from their lows this year, although analysts believe they still have room to grow, Bloomberg said. The Chinese government will continue to invest in related industries, support and subsidize leading national technology companies, and advocate "buying domestic products". The rise of these local Chinese companies has caught the attention of some of the "most discerning customers," with reports that Apple is considering Yangtze Memory Technologies as its latest supplier of iPhone flash memory, the report said.

Regarding the rapid growth of China's chip industry, American Morningstar analyst Philip Lee told Bloomberg that the basic trend is that China pursues self-sufficiency in the supply chain, which is also related to factors such as the new crown pneumonia epidemic.

According to reports, data provided by the International Semiconductor Industry Association showed that China's chip manufacturing equipment orders from overseas suppliers increased by 58% last year as local factories expanded production capacity. According to the China Semiconductor Industry Association, the total sales of Chinese chip-related companies in 2021 has grown by 18% to a record high of over 1 trillion yuan. The report also said that a global shortage of chips for large-scale auto and consumer electronics manufacturers continues, which will help Chinese chip companies enter the international market.

Philip Lee told Bloomberg that aggressive capacity building by Chinese companies will boost their global influence. "There is no doubt that China's chip makers will be able to generate revenue growth from automobiles, consumer electronics and other devices in the coming years," Li said.