Zhao Haijun, co-CEO of SMIC, said recently that due to concerns that the United States and other Western countries will reserve semiconductor production capacity to their own domestic manufacturers while prioritizing national security factors, more and more Chinese manufacturers are seeking to source chips locally in China. .
According to Bloomberg, Zhao Haijun told analysts on a recent conference call that some customers had told SMIC that it needed to secure a certain amount of production capacity in China because of concerns that the supply of chips would become more dispersed, which would affect foreign capital inflows.
However, Zhao Haijun also mentioned that the quantity that SMIC can provide is less than 10% of what customers need, so customers are worried. The future may see an oversupply of chips in some markets, but there will still be shortages in most markets.
The report further pointed out that the global chip shortage has not eased, and governments around the world are now beginning to foster domestic chip ecosystems to avoid over-reliance on certain countries (such as Taiwan, South Korea, etc.). In mature processes such as 28 and 40 nanometers, the shortage is particularly serious. These chips are usually used in the automotive and mechanical fields; this has also stimulated chip manufacturers including China to increase production capacity expansion, but it has also triggered Oversupply concerns.
For example, SMIC plans to invest 5 billion US dollars in upgrades and expansions this year, most of which will be used in 3 large new factories in Shanghai, Beijing and Shenzhen; when the 3 new projects are full, it will double SMIC’s total production capacity. However, Zhao Haijun also mentioned that SMIC itself was also hit by US sanctions, which had a significant impact on the development of its advanced technology.