How Will China's Semiconductor Industry Respond to the Chip Supply Disruptions by Samsung and TSMC?

How Can Domestic Semiconductor Manufacturers Respond?
In the face of the news released by Samsung and TSMC, domestic substitution in China has become imperative, and accelerating the development of China's semiconductor industry has become the only way to break the situation.

Currently, in order to enhance its technological capabilities and innovation levels, China's semiconductor industry needs to increase investment in basic research and materials science. This can improve the ability of independent innovation and thus reduce dependence on external technologies. At the same time, it also provides a solid foundation for the future development of the semiconductor industry.

Fortunately, in recent years, China's semiconductor equipment industry has achieved many breakthroughs. Some industry insiders said that in the past few years, many domestic equipment enterprises in China have made progress in equipment such as etching, thin films, cleaning, and packaging and testing. Leading enterprises engaged in materials and components have also shown a rapid growth trend and have made progress in radio frequency power supplies, flow meters, manipulators, vacuum pumps, precision quartz, high-purity graphite, high-purity plates, special stainless steel, and fine chemical materials.

As Chinese chip enterprises continue to develop, the market is also expected to see two virtuous cycles. First, the overall quality of the chip sector will improve, including the improvement of corporate profitability and product quality, which will make up for the shortcomings of China's capabilities in the upstream links of the industrial chain and thus accelerate the improvement of the global competitiveness of China's downstream advantageous brands and products. Second, driven by China's domestic demand, more excellent enterprises will emerge in the technology sector and step onto the global competition stage.

SIC believes that the fact that Chinese chip design companies have started to look for new foundries may lead to the restructuring of the supply chain, but in the long run, it may have a positive driving effect on the development of China's chip manufacturing industry. While facing challenges such as supply chain disruptions, technological bottlenecks, and talent shortages, China's semiconductor industry also welcomes development opportunities such as market growth, technological innovation, and policy support.