$10B chip plant highlights China’s industry momentum
HONG KONG — After Intel and Foxconn said they would build advanced factories in the United States, it might have seemed as if the U.S. were gaining high-end manufacturing momentum.
But on Friday, Californiabased chipmaker GlobalFoundries announced a $10 billion project in China, showing how the center of gravity continues to shift across the Pacific.
The new advanced-semiconductor factory, in the central Chinese city of Chengdu, is only the most recent in an array of investments, often by major multinationals, into China with the support of the Chinese government. The projects have become markedly more sophisticated, making more modern microchips, memory chips or flat-panel displays.
In 2013 Beijing announced a major initiative to expand the country’s ability to produce microchips, which act as the brains of everything from guided missiles to smartphones. Also driving the companies, according to analysts, are new guidelines urging Chinese electronics makers to buy chips made in China.
Since China has begun focusing on semiconductors, the provenance of advanced chips has become an increasingly fraught political issue. The election of President Donald Trump has further increased pressure on companies, several of which have announced plans to build facilities in the United States.
NOVEMBER 2013 In Intel’s case, it w$as6a40re.c2o5mmitment to an earlier plan the company had announced.
“Almost all of the large semiconductor enterprises in the United States have received investment offers from Chinese state actors,” according to a report from the Mercator Institute for China Studies, a think tank based in Germany.
Although analysts remain unsure of how quickly China might be able to close a huge gap with companies from Japan, South Korea, Taiwan and the United States, the funds have been slowly attracting new plants. A semiconductor industry group said in a recent report that it was tracking the production of more than 20 semiconductor manufacturing plants in China.