By Kate Yuan

(JW Insights) Apr 3 -- Wei Shaojun, chairman of the IC Design Branch of the China Semiconductor Industry Association, commented on China's IC development at an industry conference last week: "The global semiconductor industry is undergoing major changes, and some countries are trying hard to keep China at the lowest end of the value chain." “China is on the right path of self-reliance and self-improvement. We must strengthen our confidence and carry out industrial upgrading."

Wei delivered his speech at the 2023 Chengdu-Chongqing IC Industry Summit held in Chengdu of southwestern China’s Sichuan Province on March 30. In his speech, Wei touched on inherent laws of the development of the semiconductor industry, major changes and new opportunities in the global semiconductor industry.

The most fundamental factor that really affects the global supply chain is profit, said Wei, the pursuit of profit maximization is the nature of enterprises. The globalization of the supply chain will inevitably bring about changes. It is necessary to follow the laws of industrial development and meet new opportunities, added Wei.

"The status quo of China as the world's factory will not change in the short term,” he said.

“China is an emerging country in the IC industry. Although we are still in the mid-to-low end, we are now moving up as the fastest growing IC industry cluster. In 2021, the sales of China's IC industry exceeded RMB1 trillion ($145.63 billion) for the first time with the overall advance of design, manufacturing, and packaging and testing sectors.”

However, innovation investment is still insufficient, Wei mentioned. The average R&D investment accounts for 25.5% of the input, 8.5 percentage points higher than the 17% of US semiconductor companies, indicating Chinese entrepreneurs have realized the importance of R&D. But the total investment is very limited with only $1.1 billion from the 22 companies.

The IC industry requires continuous innovation and investment in design methods, materials, processes and others. The lithography machine is one of the three major challenges, in fact, the innovation of new materials and new processes is more important. Companies should focus on products that the development of integrated circuits ultimately depends, said Wei.

The development of the IC industry needs to follow the "right way", which is to follow the laws of the industry, instead of thinking about reaching the sky in one step. China's integrated circuits still have a long time to go, Wei emphasized.