Why China Can’t Fix the Global Microchip Shortage
The country has been the world’s vaunted factory floor but semiconductors require years of hard-won know-how and incredible amounts of money to design and create.
Where the chips fall short.
Photographer: Bloomberg/BloombergWhy can’t China step in to fill the chip shortage? The vaunted factory floor of the world has flooded the global economy with goods, and has often had to deal with domestic oversupplies itself. Why then has it been largely on the sidelines of the debate over solving the worldwide semiconductor shortage?
The stark reality is that, when it comes to chips and chipmaking machinery, China just can’t produce what the world needs. Its self-sufficiency in semiconductors remains low: It exports about $100 billion worth of chips but imports more than $300 billion. Meanwhile, China makes 28% of the semiconductor production equipment required by chipmakers, according to HSBC Holdings Plc. estimates.