China’s chip market dominated by foreign suppliers  

中国芯片市场被外国垄断 每年进口花2000多亿美元

(ECNS) -- China's semiconductor use accounts for more than half of the global market, but the country is overly dependent on foreign suppliers for products, according to the Economic Information Daily on Monday.

The market share of chips made by domestic manufacturers stands merely at 10 percent in China, according to Li Ping, vice general manager of XMC, a semiconductor manufacturing company in Wuhan, Hubei province.

Seventy-seven percent of cell phones sold on the global market are made in China, but only 3 percent of chips in those phones are from Chinese suppliers, Li said.

The country imports chips worth more than $200 billion a year, exceeding imports of other goods.

The monopoly of China's chip market by foreign manufacturers has blocked the country's industrial development, Li added.

Statistics show that a semiconductor chip with production value of $1 can add $100 to a country's Gross Domestic Product (GDP).

Officials from countries such as the US and Japan have thus been promoting the semiconductor industry as a strategic sector, and have allocated huge research expenditures in the field.

The high-profit business prospect has driven more foreign manufacturers to compete in controlling China's semiconductor market, which makes it even harder for domestic manufacturers to survive the competition.

Li said that poor design and dated technology are major reasons that chips made by Chinese suppliers are not popular.

The underdevelopment of China's semiconductor sector not only hinders industrial development, but also contributes to the country's weakness in cyberspace.

Imported chips are widely applied in sectors including government administration, banking, civil administration, and public security, said Xu Yitian, an official from the National University of Defense Technology.

Chips implanted with spying programs can expose confidential data and public information to risk of cyber-espionage, which can pose dangers to the country's security and development as well as people's lives and work.

Being called the heart of all equipment, semiconductor chips have been widely applied in the fields of computer, consumer electronics, network communication, and automotive electronics, and it has played a core role in development of those industries.

Xu said officials should issue policy incentives to promote research and development of Internet information products. They are also advised to introduce legislation requiring key official departments and industries to use only domestically made software and hardware.