China to establish chipmaking platform to secure domestic chip supply chain

China is planning to set up an organisation to facilitate collaboration between domestic companies and overseas semiconductor organisations to make development hubs for software, material, and manufacturing equipment.

The new initiative comes as the country looks to secure its supply chains in the face of numerous US sanctions on Chinese companies.

The organisation will reportedly be called the “cross-border semiconductor work committee” and will launch in the first half of the year, according to a report from Nikkei Asia. It will be overseen by the Ministry of Commerce in cooperation with the Ministry of Industry and Information Technology, and be coordinated by a lab at Tsinghua University, president Xi Jinping’s alma mater.

The role of the committee will be to strengthen cooperation between Chinese and foreign semiconductor industries, according to Nikkei sources. It will also invite foreign companies to set up development or manufacturing bases by working with local governments and providing funds.

It is also contemplating offering financial backing to domestic companies to help them acquire overseas semiconductor-related companies.

US chipmakers Intel and AMD are reportedly among the targeted overseas companies, as well as Infineon Technologies from Germany and ASML from the Netherlands. Some companies have reportedly already expressed an intention to participate in the new initiative.

Leading Chinese companies are also expected to take part, including Semiconductor Manufacturing International Co (SMIC), Advanced Micro-Fabrication Equipment, and Xiaomi.

Although China is set to launch this new effort to attract foreign chipmakers, it will have to compete with other countries that are pursuing similar initiatives. In June last year Japan announced it would match efforts by other countries to attract chipmakers to the country so it could build a secure supply chain at home. One official said semiconductors are now as important as food or energy.

GlobalFoundries (GF) invested over $4 billion in a new facility in Singapore in June as well, in partnership with the Singapore Economic Development Board. The company planned to expand its capacity in the country by 450,000 wafers per year, bringing its production on its Singapore campus to around 1.5 million wafers.