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New Chinese chip factory

January 20, 2017

China's largest chip maker has announced it has secured state backing for a new semiconductor factory in the city of Nanjing, which is intended to reduce China's dependence on foreign chip technology.

Symbolbild Computer Chip technology
Image: Fotolia/Edelweiss

State-owned Tsinghua Unigroup said in a statement Thursday, the $30-billion (28-billion-euro) Nanjing plant would mainly produce chips used in consumer electronics such as cellphones, cameras and computers

According to the statement posted on the company's official website, the project was of "great significance to the independent innovation, large-scale production, and marketization of China's integrated circuit industry."

The announcement comes after attempts by the company to acquire US chip makers Micron Technology and Sandisk were thwarted by the Committee on Foreign Investment in the United States (CFIUS) over national security concerns.

As a result, Tsinghua Unigroup has shifted its focus to building plants in China, launching a $24 billion memory chip factory in Wuhan city last month.

Cutting dependence

China was the largest market for semiconductors in the world in 2015. But its excessive dependence on imported chips has raised concern in Beijing over the country's national security.

In 2014, Chinese authorities pledged 100 billion yuan ($14.6 billion, 13.6 billion euros) to support the industry, with the aim of building a globally competitive semiconductor sector by 2030.

In a speech on cyber security last April, Chinese president Xi Jinping warned that China must gain control of "core" technology, saying that leaving it in the hands of foreigners is "our greatest hidden danger."

China's drive to expand its role in the semiconductor market, long dominated by US firms like Intel and Qualcomm, has likewise raised concerns in Washington. Last month, a presidential science panel warned that China was set to challenge American dominance in the industry.

uhe/jd (Reuters, AFP)