March 16, 2017 7:50 pm JST

Global chip sector needs open markets to grow

Industry association says collaboration is key

CHENG TING-FANG, Nikkei staff writer

SEMICON China has become one of the most popular events in the global chip industry thanks to robust growth in the Chinese market.

SHANGHAI -- The future growth of the local chip industry could be undermined if some countries limit market access amid a surge in protectionist sentiment across the world, President and Chief Executive Ajit Manocha of Semiconductor Equipment and Materials International, an industry association, said Thursday.

"Collaboration is the key," Manocha told reporters on the sidelines of SEMICON China, a semiconductor industry forum held in Shanghai. "So far the success of the semiconductor industry is because of the openness."

"But if we limit market access, that would probably create problems for future growth of the industry," he said.

Manocha previously served as chief executive of Globalfoundries, the world's second largest contract chipmaker in the U.S. after Taiwan Semiconductor Manufacturing Co. Prior to that, he held senior executive positions at Dutch chipmaker NXP.

Manocha's comments came a day after Chinese executives said that China must develop its own technology sector and lure talent rather than rely on mergers and acquisitions to expand. China has been facing barriers in acquiring foreign chip companies to close the technology gap with international leaders such as the U.S., Japan, South Korea and Taiwan.

These countries see China's buyout efforts as significant threats to their industry development and national security, and have been blocking Chinese offers for their tech companies.

China has been aggressively fostering its own semiconductor sector in order to reduce dependence on products provided by foreign companies such as Intel, Qualcomm, Micron, Samsung Electronics, SK Hynix, TSMC, MediaTek, and Toshiba.

Chu Lung, president of SEMI China, dismissed the notion that Chinese chip designers and makers can compete with global players now. "China is not trying to beat anyone or gain any advantage from any companies. These Chinese companies just want to join the ecosystem and to meet their own needs economically," said Chu.

Chu added that it was inevitable China would grow its own chip industry as the country, with a population of 1.3 billion, is buying an exorbitant amount of semiconductor products.

The annual SEMICON China fair has become one of the most important industry events as China's chip sector is seeing yearly revenue growth of more than 20%.

This year, more than 60,000 attended the event and close to 1,000 semiconductor suppliers exhibited their wares.

Asia300

Taiwan Semiconductor Manufacturing Co., Ltd.

Taiwan

Market(Ticker): TAI(2330)
Sector:
Industry:
Electronic Technology
Semiconductors
Market cap(USD): 181,645M
Shares: 25,930.4M
Asia300

Samsung Electronics Co., Ltd.

South Korea

Market(Ticker): KRX(005930)
Sector:
Industry:
Electronic Technology
Telecommunications Equipment
Market cap(USD): 297,879M
Shares: 148.18M
Asia300

SK hynix, Inc.

South Korea

Market(Ticker): KRX(000660)
Sector:
Industry:
Electronic Technology
Semiconductors
Market cap(USD): 42,735.5M
Shares: 728.00M
Asia300

MediaTek, Inc.

Taiwan

Market(Ticker): TAI(2454)
Sector:
Industry:
Electronic Technology
Semiconductors
Market cap(USD): 13,949.3M
Shares: 1,581.88M

Toshiba Corp.

Japan

Market(Ticker): TKS(6502)
Sector:
Industry:
Consumer Durables
Electronics/Appliances
Market cap(USD): 11,573.2M
Shares: 4,237.6M

Get Insights on Asia In Your Inbox

To read the full story, Subscribe or Log in

Get your first month for $0.99

Redeemable only through the Subscribe button below

Once subscribed, you can…

  • Read all stories with unlimited access (5 articles per month without subscription)
  • Use our smartphone and tablet apps

To read the full story, Subscribe or Log in

3 months for $9
SUBSCRIBE TODAY

Take advantage of this limited offer.
Subscribe now to get unlimited access to all articles.

To read the full story, Update your account

Resubscribe now to continue reading.
BEST OFFER:
Only US$ 9.99 per month for a full-year subscription

To read the full story, Subscribe or Log in

Once subscribed, you can…

  • Read all stories with unlimited access (5 articles per month without subscription)
  • Use our smartphone and tablet apps

To read the full story, Subscribe or Log in

3 months for $9
SUBSCRIBE TODAY

Take advantage of this limited offer.
Subscribe now to get unlimited access to all articles.

To read the full story, Update your account

We could not renew your subscription.
You need to update your payment information.