A recent study conducted by Rhodium Group, an independent research provider, has revealed China’s significant production capabilities in legacy chips. These foundational semiconductor technologies, which are of the 28 nanometer (nm) generation or older, play a crucial role in everyday electronic consumer goods, vehicles, and medical devices.
China, in conjunction with Taiwan, currently produces 80 percent of chips in the sizes ranging from 20 nm to 45 nm, and 70 percent of chips in the sizes ranging from 50 nm to 180 nm. Moreover, the study predicts that within the next three to five years, China alone will match the rest of the world’s capacity for 50 nm to 180 nm chips.
The Chinese government has been actively expanding its production capabilities for legacy chips. In fact, the study highlights that, between 2022 and 2026, China has planned 22 new semiconductor fabrication projects, surpassing North America’s 10 projects in the same timeframe.
The report by Rhodium Group also reveals that China and Taiwan account for 60 percent of the total manufacturing capacity for 20 nm to 45 nm chips, and China alone controls 30 percent of the 50 nm to 180 nm manufacturing capacity globally. If the new investments become operational, China’s share of the global capacity could potentially reach 46 percent within the next decade.
The importance of these legacy chips to the global economy has become increasingly evident during the Covid-19 pandemic. The US automotive industry, for instance, heavily relies on legacy chips, with 95 percent of its semiconductor consumption comprising these chips. The shortage of legacy chips during the pandemic resulted in a production cut of 4.3 million vehicles.
Legacy chips are not to be underestimated, as innovation in their production continues. The Centre for Strategic and International Studies (CSIS) highlights the use of silicon carbide semiconductor chips in particular, which are expected to play a crucial role in decarbonizing the economy.
The study’s findings shed light on China’s growing dominance in legacy chip production, raising questions about the potential economic security risks this poses for the United States and other countries heavily reliant on these technologies.
The source of the article is from the blog maltemoney.com.br