China announces 5-year plan for semiconductor industry... Signal of ‘systematic reconstruction’

(Shanghai = Yonhap News) Correspondent Cha Byeong-seop = Regarding the five-year plan for the semiconductor industry that China unveiled amid the intensifying technology competition between the U.S. and China, there are observations that it is a signal of a systematic and structural reconstruction of the industry beyond the existing 'tinkering prescription'.

According to Chinese media such as Global Times and Cheil Finance on the 15th (local time), Chinese experts evaluated this as a strategic change in relation to the '15th Five-Year Plan for Electronic Information Manufacturing Development (2026-2030)' announced by China's Ministry of Industry and Information Technology and the National Development and Reform Commission.

Among the key missions until 2030, the plan listed 'consolidation of basic industrial capabilities' as the first priority and stated, "We must push to overcome the difficulties of the entire integrated circuit industrial chain."

In addition, it was proposed to increase the annual sales of the electronic information manufacturing industry, which was 17.4 trillion yuan (about 3,556 trillion won) last year, to more than 30 trillion yuan (about 6,131 trillion won) by 2030. Amid the artificial intelligence (AI) boom, sales in the first half of this year were 9.41 trillion yuan (about 1,923 trillion won), an 18.5% increase compared to the same period last year.

China's electronic information manufacturing industry is playing a pillar role, ranking first in sales among all 41 industrial sectors for 13 consecutive years.

Experts explained that this five-year plan covers six core sectors of the integrated circuit industry, including design, manufacturing, packaging/test, equipment, materials, and design tools including design automation (EDA).

Zhang Xiaolong, director of the Beijing Institute of Advanced Technology, pointed out, "We explicitly stated 'resolving difficulties' in relation to the 17 key missions presented in this plan. Without semiconductors that can be controlled (in response to sanctions from the United States and other countries), the annual sales target of 30 trillion yuan lacks a foundation."

He went on to say, “Measures in the semiconductor sector have been focused on areas where China is most vulnerable and easily restricted,” and evaluated that simultaneous progress across six key sectors is necessary because if any part is broken, the entire system will come to a halt.

While the United States is restricting the supply of cutting-edge semiconductor equipment, such as extreme ultraviolet (EUV) exposure equipment, to China, Director Jang singled out exposure equipment, EDA, and advanced materials as the sore spots. In addition, the technology gap is greatest in the advanced semiconductor manufacturing process, and in many other areas, there are alternatives in China, but their performance is poor.

The plan emphasized advanced computing, including not only semiconductors, but also in-memory computing, quantum computing, and space-based computing.

In addition, energy electronics including solar cells, cutting-edge smart terminals, and the 'Beidou' satellite system were also mentioned.

This plan came at a time when technology competition between the U.S. and China is intensifying, and work on establishing the draft has been in progress for more than a year since July of last year.

Director Jang said, “This plan is no longer an approach focused on chasing specific technologies, but instead builds a more self-reliant industrial system,” adding, “It is a system that is not easily damaged, has alternative means, and can lead in certain areas.”

Ao Li, vice president of the China Information and Communication Research Institute, said, "Competition (between countries) is moving from the aspect of scale to the aspect of systematic capabilities. Electronic information manufacturing is the hardware basis for new industrialization."

He said, “Over the next 10 years, the convergence of AI and electronic information manufacturing will be a decisive variable in reorganizing the industrial form.”

Industry analyst Ma Jihua predicted, “China will be able to solve these challenges in the semiconductor sector by 2030.”

The Hong Kong media South China Morning Post (SCMP) also assessed that China had bet on semiconductors and AI in this plan to challenge America's technological dominance.