Industries across the business verticals in China are on their way to the digitization and artificial intelligence upgradation. This has boosted the demand for integrated circuits or chips in the country. Moreover, on the back of developing new competencies, including manufacturing of 28 nanometers

The Chinese government is focusing on developing the integrated circuit industry to further foster growth in this crucial sector. As a result, strong policy support and investment by the Chinese government is giving the integrated circuit industry a major fillip. 

"The Chinese government is continuously strengthening its policy support and investment in the integrated circuit industry. These focused efforts have ushered the industry in the fast lane of development. Considerable progress is also being witnessed in related technology innovation, making China’s integrated circuit industry gain international influence," says Dr Cai Yimao, Associate Dean, School of Information Science and Technology and Head of Department of Micro-Nano Electronics, Peking University.

Policy changes give stimulus to the chip industry
Various policies have been introduced in the last few years to promote the development of China’s chip industry. Most recently, in August last year, ‘Notice by the State Council of Issuing the Several Policies for Promoting the High-Quality Development of the Integrated Circuit Industry and the Software Industry in the New Era’ issued by the State Council further demonstrated the Chinese government’s support for the integrated circuit industry, especially the integrated circuit manufacturing industry.
Dr Cai emphasizes that these relevant policies demonstrate that the chip industry is one of the crucial pillars for enterprises in China and that it will continue to get the necessary support from the government. As the demand surmounts, the country is likely to witness new advancements and innovations in integrated circuit technology development, as well as stress on talent training.  
Chip production capacity in China scales up
Encouraged by pathbreaking government measures, the chip manufacturing industry in the country has witnessed significant progress. 
According to data released by the State Council, China is all set to reach 70% chip self-sufficiency in the next five years. This is significant considering that the country is the largest consumer of chips in the world. It has already covered technology nodes and links of 28 nanometers and 14 nanometers requirements in Mainland China to a certain extent. 
There are many companies in China leading the charge in manufacturing cutting-edge integrated circuits or chips. For instance, SMIC is the first integrated circuit company to achieve mass production of 14 nanometers Fin FETs, representing the most advanced level of independent research and development of integrated circuit manufacturing technology in mainland China. It has also successfully launched China’s most advanced 24 nanometers NAND, 40 nanometers high-performance image sensors and other special processes. In addition, it has joined hands with companies in various fields to achieve continuous growth in market segments such as special memory and high-performance image sensors. 
Besides SMIC, many domestic companies have the equipment and capability to enter the 28 nanometers and below wafer manufacturing line. A leading business, North Huachuang, launched the first domestic Atomic Layer Deposition Equipment in 2018 that can meet the process requirements of 28 nanometers and 14 nanometers Fin FET. In terms of thin-film growth equipment, the PVD equipment of North Huachuang can also be used for 28 nanometers process production.
All these proofs tell that the domestic chip production capacity is strengthening in China, especially for 14 nanometers chips, China has already mastered the technology for mass production of 14 nanometers chips, and this will be realized next year.  
In addition, China Micro Semiconductor’s dielectric etching machine can meet the world’s most advanced 5 nanometers process and has now obtained orders from major integrated circuit manufacturing companies, including TSMC and SMIC.
Taking China’s chip industry to the next level
"Domestic substitution and independent control cannot be the umbrella of certain monopolistic enterprises. There should be healthy competition for stimulating market vitality and promoting technological innovation in the integrated circuit industry," believes Dr Cai.
For the development of China’s integrated circuit industry, Dr Cai suggests improvements in four aspects: 
1. Continue to promote cooperation: Regular introduction of relevant industrial policies and adequate investment can help enhance the field of integrated circuits and technology applications. It is also imperative to promote the integration of China’s integrated circuit industry with the world’s top supply chains. Additionally, the industry should work towards attracting the world’s leading semiconductor manufacturers to set up production and Research and Development institutions in the country. 
2. Encourage innovation in the domestic market: Innovation and iteration of the domestic integrated circuit technology market based on national strategy and market demand is critical to help scale up the chip industry in the country. Both leading enterprises and start-ups in China should adopt an innovation mindset to grow and contribute to build a robust semiconductor industry.
3. Strengthen the construction of industry associations and alliances: It is critical to form relevant industry associations and alliances to foster the growth of the chip industry in China. These institutions can play an active role in establishing international standards, regional cooperation, as well as building an ecosystem that promotes efficient industry innovation, development and healthy competition.
4. Build fruitful partnerships: Under the premise of ensuring free and fair competition in the market, leading businesses in the industry should join hands to integrate upstream and downstream development and optimize resource allocation. This will help the ecosystem grow together, become competitive, gain world influence and climb the echelons of success.
With strong policy support coupled with investments in key areas, the Chinese chip industry is on the cusp of major growth and expansion. It is, however, crucial for the industry to form relevant partnerships and ensure innovation, as suggested by Dr Cai, so it gains a competitive edge over other countries.