By Li Panpan

(JW Insights) Apr 21 -- China's Compound Semiconductor Industry Development Conference was held in Wuhan, China’s central Hubei Province, from April 19 to 21. Wu Ling, the President of China Advanced Semiconductor Industry Innovation Alliance addressed the opening ceremony, reported JW Insights.

Wu pointed out that Chinese compound semiconductor industry faces both challenges and chances. The global semiconductor industry is reshaping, and China has formed a new strategy for semiconductor development driven by new materials. The third-generation semiconductor with silicon carbide (SiC) and gallium nitride (GaN) will become the strategic materials to support high-quality economic development.

China's third-generation semiconductor industry output reached about RMB689.2 billion ($100 billion) in 2022, among which LED lighting application alone accounts for RMB675 billion ($97.94 billion). Power semiconductor and RF applications registered RMB14.1 billion ($2.05 billion), according to Wu.

The challenging geopolitical environment added risks to China in obtaining core material and equipment under sanctions, with higher costs and longer lead times.

China's third-generation semiconductor industry also faces challenges like low yield, weak patent portfolio, and a low proportion of homegrown equipment. Notably, she mentioned the over-diversified investment, overlapped investment in low-entry level sectors, and the over estimated valuations of some companies, leading to a bubble in the industry.

Nevertheless, as SiC and GaN semiconductors come in discrete sectors, Wu noted that it would require lower investment than integrated circuits with less requirements on design complexity and lower equipment precision. And there is ample market space for homemade products, under growing concerns for supply chain security. She also suggests that the industry find a breakthrough point in Belt and Road and BRICS countries.