By Kate Yuan

(JW Insights) Jun 29 -- A new analysis shows that China could emerge as a leader in next-generation power semiconductor production in the next five to 10 years, South Korean media the Hankyoreh reported on June 28, citing a report by the Korea Institute for International Economic Policy (KIEP).

In its “Status of Promotion of China’s Semiconductor Localization” report released on June 27, KIEP explained that China is pursuing support and expanding competitiveness for next-generation power semiconductors (SiC and GaN devices) used in electric vehicles and energy storage systems (ESS) in view of capturing the lead in technology.

Next-generation power semiconductors are the focus of Swiss-Italian company STMicroelectronics, which is investing $3.2 billion to build a power semiconductor fab in the Chinese city of Chongqing by 2025.

China is focusing its investment on building up its advanced semiconductor chip design (fabless) capabilities. The number of Chinese semiconductor fabs increased by 4.1 times from 681 in 2014 to 2,810 in 2021, and fabless revenue increased by 4.3 times (to RMB451.9 billion in 2021) during this period.

China’s rate of localizing semiconductor equipment is also rising rapidly. As of last year, the localization rate of chip equipment in China was 35%, up 14 points in a year.

Naura Technology, AMEC, and others have been rapidly acquiring technology through government investment support and have significantly increased their localization rates in process areas such as etching, thin films, and deposition.

Meanwhile, China’s semiconductor manufacturing competitiveness is still lagging behind global leaders by about two years for NAND flash memories and five years for DRAM. The localization rate for CPUs, DRAM, and NAND flash is still in the single digits as of 2021, according to the Hankyoreh report.