China to invest $10 billion in its semiconductor industry this year

EE Times writes China plans to invest this year half of the $20 billion it set aside to grow the country's chip industry. About 70 percent of the $10 billion is expected to target Chinese wafer fabs in yet another attempt to make China a major producer of chips.

The site points out similar efforts over the past 25 years were a failure but this time the government intends to take a more market-oriented approach. This time the money will be focused in a few companies and locations, whereas previous efforts often spread too thin across many provincial projects, and were poorly managed as state planners were too slow to make decisions and take risks needed to launch a chip fab.

"It's not clear if the new scheme will work, but I think it's the right direction," said Simon Yang, chief executive of XMC, one of China's two 12-inch fabs that hopes to get as much as $10 billion.

China imports as much as half the world's chips but produces less than 10% of them, an expensive gap state planners want to narrow. Since 1990, the government has bankrolled major chip efforts about every five years, spawning at least a half dozen fabs to date.

"So far you do not see any of them that can grow sustainably by themselves, meanwhile Taiwan and Korea have grown into powerhouses of advanced wafer manufacturing," said Yang in a talk at the Industry Strategy Symposium here.