US - China | The Secretive China Semiconductor Industry Strategies

The semiconductor industry has seen relatively slow development in China. And it has become one of the top fields where the Chinese Communist Party has been seeking breakthroughs. Beijing has provided China’s chipmakers with about $50 billion dollars in subsidies over the past 20 years. In 2014, the CCP invested about 100 billion dollars to fund chip development. But as of 2019, domestic productions only fulfilled 16% of chips used by China. This explains why the CCP decided to adopt a more secretive strategy. In 2016, the state-backed Fujian Jinhua Integrated Circuit Co, or JHICC, entered into a partnership with Taiwanese chipmaker United Microelectronics Corp, or UMC. UMC recruited from American memory-chip maker Micron Technology Inc.’s Taiwan subsidiary MMT and asked employees to steal trade secrets from their former employer for JHICC’s benefit. After indictment by U.S. prosecutors, JHICC lost technical support and had to sell its plant. Tsinghua Unigroup, a state-backed chipmaker, hired engineers f