Beijing is facing multiple obstacles in its state-led effort to consolidate China's fragmented semiconductor industry into national champions capable of competing with major US and European rivals. Talks to merge a group of chip equipment makers have stalled due to conflicts over ownership structure, valuation gaps, and politically charged local interests. Over the past decade, local governments have backed numerous foundry projects that built capacity in parallel, resulting in an oversupply of mature chips and steep price declines. Despite these challenges, Chinese automakers are increasingly developing chips in-house, aligning with Beijing's ambition to rely exclusively on domestic chips for the automotive industry. Meanwhile, China continues to struggle with deflationary pressures despite recent policy shifts.
CHINESE AUTOMAKERS’ PUSH FOR IN-HOUSE CHIPMAKING ALIGNS WITH BEIJING’S GOAL OF FULLY DOMESTIC SUPPLY FOR AUTO INDUSTRY: NIKKEI
Chinese automakers' drive to develop chips in house is in line with Beijing's ambition to rely exclusively on domestic chips for the industry. https://t.co/hjKwJA9U0s https://t.co/WuvpahDf58
CHINA STRUGGLES TO ESCAPE DEFLATIONARY PRESSURES DESPITE POLICY SHIFT: WSJ