China is making new rules regarding chip manufacturing, which is not a good sign for America, Japan and European countries. To increase its dominance in chip manufacturing, China has made it mandatory for companies to use at least 50 percent domestically made products.
The Reuters report claimed that China Semiconductor is trying to become self-reliant in terms of supply, due to which it wants to use domestically made products in chip manufacturing. However, no information about it has been revealed publicly yet.
The report said that chip companies seeking government approval to build or expand plants have been made clear by officials in recent months that they will have to prove through tenders that at least half of their equipment will be Chinese-made. This order is one of the most special measures taken by China to reduce its dependence on foreign technology.
America Plan accelerated after the ban
The report further said that the US had banned the sale of advanced AI chips and semiconductor equipment to China by tightening technology export restrictions in 2023, after which China has further accelerated the pace of making self-reliant chips.
After this US ban, many products stopped being supplied to China. In such a situation, China accelerated the work on the plan to make chips from domestically made products and gave instructions to the chip maker companies. Under the 50% rule, Chinese manufacturers are choosing domestic suppliers even in areas where foreign equipment is available from the US, Japan, South Korea and Europe.
Plan to use up to 100 percent domestic products
Reuters said that applications that do not meet the deadline are usually rejected. However, officials give some relaxations based on supply constraints. These requirements have been relaxed for advanced chip manufacturing where domestically developed equipment is not yet fully available. A source told Reuters that officials’ preference was to go well above 50%. Their goal is to use 100% domestic equipment in the final plants.
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