Abstract

This article is the first of two that will examine China's policies toward the semiconductor industry and the elements that will ultimately determine its success or failure. China's efforts to foster local semiconductor sector growth since 2014 have garnered significant attention from across the world. The goal of this series is to provide readers with a historical perspective on the numerous efforts made by the Chinese government to promote the growth of the country's homegrown semiconductor sector, beginning in the 1950s. The first section provides a background on China's previous attempts at semiconductor industrial planning, details the current goals, and analyses their performance thus far. Part two analyses why China's strategies in the past have failed, how lessons have been applied to the present, and whether or not the current approach has a chance of succeeding

Keywords

• Semiconductors,
• China trade,
• Made in China 2025,
• Industrial planning,,
• Global value chains,
• foreign direct investment.

References

• Fuller, Douglas B. Paper Tigers, Hidden Dragons: Firms and the Political Economy of China’s Technological Development. Oxford, UK: Oxford University Press, July 2016.
• Fuller, Douglas B., Akintunde I. Akinwande, and Charles G. Sodini. “The Globalization of R&D’s Implications for Technological Capabilities in MNC Home Countries: Semiconductor Design Offshoring to China and India.” Technological Forecasting and Social Change 120 (2017): 14–23. https://www.sciencedirect.com/science/article/pii/S0040162517304080.
• Gilli, Andrea, and Mauro Gilli. “Why China Has Not Caught Up Yet.” International Security 43, no. 3 (Winter 2018/19). https://www.mitpressjournals.org/doi/abs/10.1162/isec_a_00337.
• Goodrich, Jimmy. “China’s 13th Five-Year Plan: Opportunities and Challenges for the U.S. Semiconductor Industry.” Written testimony submitted to the U.S. China Economic and Security Review Commission, April 27, 2016. https://www.uscc.gov/sites/default/files/Jimmy%20Goodrich_Written%20Testimony%20 042716.pdf.
• Hanemann, Thilo, and Daniel H. Rosen. “Chinese Investment in the United States: Recent Trends and the Policy Agenda.” Rhodium Group, December 2016. https://rhg.com/research/chinese-investment-in-the-united-states-recent-trends-and-the- policy-agenda/.
• Harwitt, Eric. China’s Telecommunications Revolution. Oxford, UK: Oxford University Press, May 2008.
• Hong, Junjie. “WTO Accession and Foreign Direct Investment in China.” Journal of Chinese Economic and Foreign Trade Studies 1, no. 2 (2008): 136–47. https://econpapers.repec.org/RePEc:eme:ceftpp:v:1:y:2008:i:2:p:136-147.
• Huang, Yasheng. Selling China: Foreign Direct Investment During the Reform Era. Cambridge, UK: Cambridge University Press, 2003.
• IC Insights. “Nine Top-15 2018 Semi Suppliers Forecast to Post Double-Digit Gains,” November 12, 2018. http://www.icinsights.com/news/bulletins/Nine-Top15-2018-Semi- Suppliers-Forecast-To-Post-DoubleDigit-Gains-/.
• IHS Markit. “With Its Highest Growth Rate in 14 Years, the Global Semiconductor Industry Topped $429 Billion in 2017, IHS Markit Says.” Press release, March 28, 2018. https://technology.ihs.com/601432/with-its-highest-growth-rate-in-14-years-the-global- semiconductor-industry-topped-429-billion-in-2017-ihs-markit-says.
• Intel Corporation. “Comments Concerning Proposed Determination of Action Pursuant to Section 301: China’s Acts, Policies, and Practices Related to Technology Transfer, Intellectual Property, and Innovation—Docket Number: USTR-2018-0018,” July 23, 2018.
• Intel Corporation. “Intel Supports American Innovation with $7 Billion Investment in Next- Generation Semiconductor Factory in Arizona.” News release, February 8, 2017. https://newsroom.intel.com/news-releases/intel-supports-american-innovation-7-billion- investment-next-generation-semiconductor-factory-arizona/.
• Jiang, Kun, Wolfgang Keller, Larry D. Qui, and William Ridley. “International Joint Ventures and Internal vs. External Technology Transfer: Evidence from China.” NBER Working Paper No. 24455, March 2018. https://www.nber.org/papers/w24455.
• King, David. “Size Matters: Barriers to Entry in the Microelectronics Industry.” National Defense University, January 2003. https://apps.dtic.mil/docs/citations/ADA422057.
• Klaus, Michael. “Red Chips: Implications of the Semiconductor Industry's Relocation to China.” Journal of Asian Affairs 29, no. 4 (2003): 237–53. https://www.tandfonline.com/doi/abs/10.1080/00927670309601508.
• Lewis, James A. “Learning from the Superior Techniques of the Barbarians: China’s Pursuit of Semiconductor Independence.” Center for Strategic and International Studies, January 2019. https://www.csis.org/analysis/chinas-pursuit-semiconductor-independence.
• Li, Yin. From Classic Failures to Global Competitors: Business Organization and Economic Development in the Chinese Semiconductor Industry. Master’s thesis, Fudan University, August 2011. https://www.researchgate.net/publication/304581717_From_Classic_Failures_to_Global_ Competitors_Business_Organization_and_Economic_Development_in_the_Chinese_Se miconductor_Industry.
• Li, Yin. “State, Market, and Business Enterprise: Development of the Chinese Integrated Circuit Foundries.” Chap. 7 in China as an Innovation Nation, edited by Yu Zhou, William Lazonick, and Yifei Sun. Oxford, UK: Oxford University Press, April 2016. https://www.researchgate.net/publication/281455103_State_Market_and_Business_Enter prise_Development_of_the_Chinese_Integrated_Circuit_Foundries.
• Lin, Yatang, Yu Qin, and Zhuan Xie. “Technology Transfer and Domestic Innovation: Evidence from the High-Speed Rail Sector in China.” CEP Discussion Paper No. 1393, Centre for Economic Performance, December 2015. https://qinyurain.weebly.com/uploads/4/7/2/8/47280099/hsrtt_april17.pdf.
• Lu, Yi, Zhigang Tao, and Lianming Zhu. “Identifying FDI Spillovers,” Journal of International Economics, 2017. https://ideas.repec.org/a/eee/inecon/v107y2017icp75-90.html.
• Mays, Susan K. Rapid Advance: High Technology in China in the Global Electronic Age.
• Doctoral dissertation, Columbia University, 2013. https://academiccommons.columbia.edu/doi/10.7916/D8HQ464Q.
• Moore, Thomas G. China in the World Market: Chinese Industry and International Sources of Reform in the Post-Mao Era. Cambridge, UK: Cambridge University Press, March 2002.
• Mozur, Paul. “Germany Withdraws Approval for Chinese Takeover of Aixtron.” New York Times, October 24, 2016. https://www.nytimes.com/2016/10/25/business/dealbook/germany-china-technology- takeover.html.
• Mozur, Paul. “Obama Moves to Block Chinese Acquisition of a German Chip Maker.” New York Times, December 2, 2016.
• https://www.nytimes.com/2016/12/02/business/dealbook/china-aixtron-obama-cfius.html.
• Mozur, Paul, and Jack Ewing. “Rush of Chinese Investment in Europe’s High-Tech Firms Is Raising Eyebrows.” New York Times, September 16, 2016. https://www.nytimes.com/2016/09/17/business/dealbook/china-germany-takeover- merger-technology.html.
• Organisation for Economic Co-operation and Development (OECD). FDI Regulatory Restrictiveness Index. http://www.oecd.org/investment/fdiindex.htm (accessed May 16, 2018).
• President’s Council of Advisors on Science and Technology (PCAST). Ensuring Long-Term
• U.S. Leadership in Semiconductors, January 2017. https://obamawhitehouse.archives.gov/sites/default/files/microsites/ostp/PCAST/pcast_en suring_long-term_us_leadership_in_semiconductors.pdf.

This work is licensed under a Creative Commons Attribution 4.0 International License.