China's Chip Market 'Not Posing a Threat to the US'

By Prei Dy, | March 15, 2017

China is lags behind the US in terms of making chips, Zhou Zixue, chairman of Semiconductor Manufacturing International Co. (SMIC), said.  (YouTube)

China is lags behind the US in terms of making chips, Zhou Zixue, chairman of Semiconductor Manufacturing International Co. (SMIC), said. (YouTube)

China's chip market is still not sophisticated enough to compete with the United States, Zhou Zixue, chairman of Semiconductor Manufacturing International Co. (SMIC), said on Tuesday.

"The Chinese chip sector is still very weak in its preliminary developing stage," Zhou said, noting that not a single Chinese semiconductor company is on the global top 20 lists like the United States, Japan, Taiwan, and South Korea.

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"We are not posing a threat to the US at all," he added.

According to Nikkei Asian Review, Zhou's comment appears to downplay the United States' claim that China is aggressively boosting its domestic chip industry. Such growth is likely to cause harm to American chipmakers and weaken its national security.

Zhou also said that negative scoops from media have caused unnecessary concerns from other countries. Unconvinced by the reports, he argued that US chip giants like Intel and Qualcomm have even gained a lot of money in China.

While China has been aggressive in developing its chip industry to wean itself from foreign firms, it apparently still lags behind overseas companies such as Qualcomm, Intel, Samsung Electronics, Toshiba, and TSMC.

However, for many semiconductor suppliers and equipment manufacturers, the growth of the Chinese market is still the fastest and most attractive.

Peter Wennink, president and CEO of Europe's ASML, told Nikkei Asian Review that China accounts for an estimated 12 percent of ASML's revenue. The Dutch firm gained a sale of $7.22 billion in 2016.

"Our Chinese customers' plans are very aggressive," he said. "If Chinese IC industry expands faster than the global industry, the market share of China and for our business will grow."

ASML, which is the largest semiconductor-equipment maker in Europe, is a supplier of leading chipmakers across the globe including Intel, Samsung, TSMC, and China's SMIC to name a few.


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