Stock Groups

IDC on China’s semiconductor tech ambitions


A Wednesday analyst revealed that China is yet to achieve the production capabilities required to create cutting-edge chips, despite spending billions on its domestic semiconductor industry.

Semiconductors are found everywhere, in smartphones, cars and home appliances.

“I am still convinced that [China is]Mario Morales, the group vice president of enabling technologies at International Data Corporation told CNBC that he was “probably three- or four generations behind what’s considered leading edge.”Squawk Box Asia.”

If you take a look at the leading edge, then we are talking 16-nanometers or below. Morales said that the majority of this comes primarily from Taiwan and Korea. To a lesser extent, it is also available in the U.S. with Intel.

Chips are made using a process called lithographyComplex and costly machines produce narrow beams of light that shine onto silicon wafers treated with photoresist chemicals, creating intricate patterns.

On May 25, 20,21 employees worked on the production line for silicon wafer in a GalaxyCore Inc. factory. It was located in Jiashan County Jiaxing City Zhejiang Province.

Guo Junfeng | Visual China Group | Getty Images

China is dependent on self-sufficiency

China’s technology giants Alibaba, Tencent, Baidu MeituanHave all started investing into chip development.

Morales, IDC’s chief economist explained that even with large investments from China the country needs access to the software and equipment necessary to make high-end chips.

Analysts previously saidChinese semiconductor firms that concentrate on long-tail legacy technology are predicted to be successful. This is essentially a range of chips that are less sophisticated for applications such as power management, microcontrollers and sensors. These products can be used to supply local consumers with the increasing demand. These chips remain very vital to the supply chain.

Morales, IDC’s chief economist said that this is where the Chinese ecosystem will flourish and grow. He also stated that they are likely to begin taking market share. China will need to be competitive for a while, and it may take more than ten years, at most, before they are able to become the world’s leading economy.

SMIC is China’s most significant and largest chipmaker.

Morales explained that the Chinese have 28-nanometer capabilities and started sampling at 14-nanometer. They need customers in order to scale this capability and most of China’s ecosystem are not using it.

“They need U.S. partners or customers, European customers or Taiwanese clients to scale that technology efficiently, so that it can reduce the cost structure they require,” he said.

Sam Shead from CNBC contributed to this report.