'Consensus' Needs to be Built in China's Chip Industry, Says Chairman of the...

TMTPOST--The chip industry in China has not yet reached the stage of explosive growth, but that day will come, Chen Nanxiang, chairman of the China Semiconductor Industry Association, says in an exclusive interview with CGTN.

Chen believes that with a growing talent base and long-term thinking, China’s chip industry can prosper in the competitive global market.

Chen, a prominent figure in China’s semiconductor field, noted that China's development in the integrated circuit sector has taken numerous detours.

"China's objective has always been to have a robust semiconductor industry. However, in the past, this task was predominantly undertaken by universities, research institutes, and academies, which approached it from a more academic perspective. What China needs now is an industry with innovative services and business models that can transform into the most economical commercial value," Chen elaborated.

Chen observed that China’s approach has evolved as stakeholders—including policymakers and industry players—have gradually found out which way is effective. Although China has not yet experienced explosive growth in the semiconductor sector, Chen is optimistic about its prospects.

"While we have not yet identified the best development model, we now understand which approaches are bound to fail. After a lengthy period of trial and error, we are confident that a significant successful model is emerging in the future development of the integrated circuit industry," Chen remarked.

Chen believes that the industry will see significant progress in the next three to five years. However, Chen's remarks took a critical turn when addressing the gap between China’s and Western semiconductor technologies. He pointed out that the industry has lost the "consensus" once central to Moore's Law.

Chen highlighted that the current state of 3nm technology from companies like Samsung and Intel shows varying definitions and implementations.

"In the era when Moore's Law was effective, there was a clear consensus on how technology would evolve at each node. Today, it is challenging to predict developments for the next three to six years," Chen noted.

Chen attributed this uncertainty to the shift towards an application-driven era. "The focus has shifted from wafer manufacturing technology to the need for advanced packaging technologies. For instance, AI chips require both cutting-edge wafer manufacturing and the latest packaging technologies. It is predicted that packaging technology may soon surpass wafer manufacturing technology in importance," he said.

This shift suggests that packaging technology might become a critical competitive advantage for China in the global semiconductor market, potentially providing a key lever against Western semiconductor leaders.

Chen, 62, joined Yangtze Memory Technologies Co., Ltd. (YMTC) as Chairman and acting CEO in May 2021. Prior to that, he worked at Unigroup and China Resources Microelectronics, and accumulated rich experience in the semiconductor industry. He holds degrees from the University of Electronic Science and Technology of China, the Beijing Institute of Technology, and Beijing Normal University.

At the SEMICON China 2023 conference, Chen addressed the disruption of the global semiconductor supply chain, suggesting that it has entered a phase of "turbulence and disorder." He expressed concern about the impact of this disruption on global supply chains and industry development models.

Chen also made a call for integrity and fairness in the industry, citing challenges with equipment procurement and suggesting that a fair repurchase system should be established. His comments have drawn considerable attention, highlighting the need for a fair and transparent approach in the industry.

Reflecting on the technological shift, Chen viewed it as a great opportunity for China. "If we continue to rely on outdated technological paths, we will only lag behind as others advance. With the disappearance of path dependency, there is a need for a new development model—one that is application-driven. This model will generate many application-derived demands in the Chinese market, presenting new opportunities for China," he said.

Chen acknowledged the growing public interest in the semiconductor industry, noting that it has increased the industry’s visibility and attractiveness to talent. However, he also recognized that this heightened attention brings significant pressure. "The external focus on the industry has both positive and negative impacts," Chen said.

"We hope that we view the development of the chip industry not as a sprint, but a marathon. It requires endurance and a long-term commitment to truly succeed. We ask for patience and understanding from the market as the industry builds its foundation and demonstrates its capabilities. This is essential for the development of China’s semiconductor industry," Chen stressed.