| Information |  | |
Derechos | Equipo Nizkor
| ||
| Information | | |
Derechos | Equipo Nizkor
| ||
24Oct22
Will US target China's auto chip supply next?
Shanghai is planning to build a world-class hub for automobile chip makers to serve the sector's strong demand, a homegrown upshot of Washington's widening bans on shipping chips and chip-making equipment to China.
Electronics including chips now account for 55% of a new car's total cost on average, compared with 25% a decade ago, according to a recent auto industry group report on the evolution of "smart" cars. That gives the US another potential leverage point in its spiraling tech war on China, according to Chinese columnists and automakers.
Automobiles use mainly 28-55 nanometer (nm) chips, less sophisticated than the 7-14nm chips used in smartphones and laptop computers, which require lower power consumption and higher computing speeds. Auto-related chips are made largely from older-generation deep ultraviolet (DUV) lithography tools, which have not yet been targeted by US sanctions.
But analysts and observers wonder if that could soon change. Since early 2020, the US has pressured the Netherlands against exporting to China advanced extreme ultraviolet (EUV) lithography equipment used in making high-end chips smaller than 22nm.
The Biden administration was earlier seeking to bar Chinese companies from obtaining DUV equipment, according to media reports in July, but as of now, China can still import the lower-end chip-making tools.
Chinese auto executives recognize and are responding to that next-level threat. Fu Xinhua, vice chairman of the Shanghai Municipal Commission of Economy and Informatization, said in an October 25 opening speech at an auto-related exhibition in Shanghai that China should accelerate its auto chip technology development to maintain and grow the Yangtze River Delta region's auto supply chain.
In his speech, Fu asserted Shanghai had the technology, talent and capital to produce automobiles and encouraged greater cooperation between auto and chip makers in the Yangtze River Delta region. He noted that Shanghai's auto electronics sector's revenues grew 15% year-on-year in the first nine months of this year.
"We will concentrate the resources in Yangtze Delta River to push forward the innovation and application of auto chips to form an ecosystem," Fu said, adding that Shanghai would take the initiative to implement the Ministry of Industry of Information Technology (MIIT)'s plan to boost the auto chip sector.
On March 18, the MIIT published a document to call on Chinese auto and chip makers to jointly develop and standardize their auto semiconductors, which include multipoint control unit (MCU), sensor, telecommunication, memory, safety, computing and new energy vehicle chips.
Zhu Hong, a senior statistician in the Industry Department of the National Bureau of Statistics, said Thursday that automakers' profits grew 47.4% year-on-year in September, driven by the recovery of China's supply chains and strong growth in new energy vehicle production.
Zhu said the combined profit of auto manufacturers only fell 1.9% year-on-year in the first nine months of this year, compared with a decline of 7.3% in the first eight months.
As most districts in Shanghai were locked down between mid-March and mid-May this year, the city's auto sales fell to zero in April, according to the Shanghai Automobile Sales Association. The sector has started recovering since June, the association said.
On October 11, the China Association of Automobile Manufacturers (CAAM) announced that the country exported 301,000 cars in September, up 73.9% from a year ago. It said China's exports of new energy cars more than doubled to 50,000 units over the same period.
CAAM said China had surpassed Germany to become the world's second-largest auto exporter after Japan. It said China exported 2.11 million vehicles while Germany shipped 1.91 million units in the first three quarters of this year.
Qin Shu, secretary general of the Jiangsu Integrated Circuit Industry Association, said with its advantage in semiconductors and autos, the Yangtze River Delta should be upgraded into a world-class hub for auto chip makers.
Qin said the auto chip sector would enjoy sustained strong demand as every new automobile requires more than 1,000 chips on average.
Xu Xiufa, assistant secretary general of the Shanghai IC Association, said although global demand for consumer electronics and computers has been sluggish so far this year, demand for auto chips was still strong thanks to the robust growth in smart vehicle sales.
Xu said Chinese firms should boost their efforts to develop more mid- and high-power chips capable of handling high electrical currents, voltages and frequencies for new energy vehicles.
Due to a global shortage of high-power chips, some Chinese automakers started to produce their own chips in recent years. In January, BYD Semiconductor, a unit of the Shenzhen-based BYD Company, opened an 8-inch chip production line in eastern Shandong province with a target of producing 360,000 wafers annually, according to news reports.
Li Ming, general manager of Anhui Jianghuai Automobile Group Corp, said last month that the latest US chip and chip-making technology bans have not yet had a big negative impact on Chinese automakers but that the sanctions would slow the growth of China's auto sector over the long run.
He said while global automakers focus more on self-driving vehicles in the coming decade, Chinese automakers will lose their current advantage due to a lack of high-end 5-7nm chips.
He said if the US expanded its current export ban to cover auto chips, namely 28nm chips, Chinese automakers would be seriously hurt as they bought 95% of their chips from international chip producers. He said Chinese chip makers were still lagging well behind their global peers in overall competitiveness.
Chinese MCU chip makers include Sino Wealth Electronic, GigaDevice and AutoChips Inc while logic chip makers include Huawei, Horizon Robotics and Black Sesame Technologies.
High-power chip manufacturers include Hangzhou Silan, Nexperia and BYD Semiconductor. Memory chip makers include Yangtze Memory Technologies Co (YMTC), GigaDevice and ChangXin Memory Technologies.
On October 7, YMTC and 30 other Chinese "entities" were added to the US Commerce Department's Bureau of Industry and Security's (BIS) "unverified list", meaning they are barred from buying US chips and US engineers are banned from providing services to certain Chinese chip makers.
A Guangdong-based Chinese columnist wrote in an article earlier this month that China would probably surpass Japan to become the world's largest automobile exporter next year but crossing that threshold would likely lead to more punitive sanctions from the US.
He opined that China should start preparing for next-level US sanctions on its supply chain of auto chips, batteries, materials and core auto parts.
[Source: By Jeff Pao, Asia Times, Bangkok, 29Oct22]
 | This document has been published on 06Nov21 by the Equipo Nizkor and Derechos Human Rights. In accordance with Title 17 U.S.C. Section 107, this material is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes. |