The China government plans to offer over CNY1,000 billion (US$143.3 billion) to subsidize China-based semiconductor makers again in a bid to boost development of local semiconductor supply chains, according to Reuters and Bloomburg. China-based automotive IC makers stand a chance of becoming beneficiaries mainly because China currently has low self-sufficiency for automotive semiconductors.
As the same subsidization in the past focused on advanced semiconductor manufacturing processes and some of the subsidy recipients proved unsatisfactory in actual performance compared with proposed plans, China's National Development and Reform Commission will strictly screen applicants for subsidies this time.
While details concerning the subsidization are not yet available, the question is whether manufacturing processes of automotive semiconductors are advanced enough to entitle corresponding makers to receive subsidies. According to semiconductor industry analysts in China, eligibility of applicants will depend on their discourse and proposed plans, for examination criteria will be too narrow if qualification hinges merely on advanced technology. Thus, China-based makers of automotive semiconductors are likely to be eligible for subsidies although corresponding manufacturing processes are comparatively not advanced.
For example, automotive MCU is based on mature 28-65nm manufacturing processes and such ICs used in China are produced by GlobalFoundries, TSMC, United Microelectronics, Vanguard International Semiconductor as well as China-based Semiconductor International Manufacturing and Hua Hong Semiconductor.
While manufacturing processes for automotive MCU are mature and not advanced, China's demand for such ICs takes up 23% of the global total, 80% of which relies on imports. For high-end automotive MCU in particular, imports account for 95%.
Currently, most of China-produced automotive ICs are used in in-car infotainment and driver's and passenger comfort, while few are used in key automotive functions. As China has become the largest single market of electric vehicles, China's largest domestic demand for automotive semiconductors and low self-sufficiency are favorable for China-based makers of automotive ICs to obtain subsidies.
Article translated by Adam Hwang
