The ‘Made in China 2025’ Chip Initiative Falls Short Of Goal

Photo by Adi Goldstein on Unsplash

The ‘Made in China 2025’ initiative made some waves when it was announced. The plan listed ten industries on which the Chinese government focused to become a world leader, among these ten industries being chip manufacturing, in the Infomation Technology Industry sector. 

In the United States, the Council on Foreign Relations stated in 2018 that it is a ‘real existential threat to U.S. technological leadership,’ which was shortly followed by a statement by the Li Keqiang Government that maintains the plan is in line with China’s World Trade Organization obligations. All leading up to the 15 June 2018, when the Trump administration imposed higher tariffs on Chinese goods, escalating the trade tensions between China and the U.S. The tax list essentially focuses on products detailed in the Made In China 2025 plan, including IT and robotics-related products.

The local output will meet only 21% of demand in 2024, US research firm warns, revealing that Chinese-made chips will only value 20.7% of the national market in 2024, falling short of the 70% proposed target that the Chinese Li Keqiang Government proposed. 

According to American research firm IC Insights, the Chinese production of integrated circuits is predicted to double in value within 2019-2024 to $43 billion, which will equal approximately 8.5% of the global market. The firm also revealed that the world’s largest chip market is expected to reach $208 billion in 2024. As a result, IC Insights forecasts that at least 50% of IC production in China in 2024 will come from foreign companies such as SK Hynix, Samsung, Intel, TSMC, UMC, and Powerchip, with factories in China.

Self-sufficiency is the name of the game here, and most countries, especially after this global pandemic, learn that at one point, they need to make it on their own. Self-sufficiency is needed. 

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