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As China charges forth to achieve "semiconductor independence" in the face of punishing global sanctions, the city of Shanghai is vying to be the place where Chinese chips get made.
On April 7, the Shanghai local government held a Global Investment Promotion Conference at which sixteen semiconductor deals were signed. The deals include companies that manufacture critical materials for chipmaking, like photoresists or silicon wafers.
At the center of Shanghai's semiconductor ambitions is its Lin-gang Special Area, situated near 100,000 acres of underdeveloped land near the southeast border of the city. In August 2019, China's State Council announced that this area would be designated as a Free Trade Zone to attract foreign companies and investment.
From the start, semiconductors were named as one of the four key industries that Lin-gang aimed to build. In March, the Lin-gang government released a five-year plan that pledged to build a local semiconductor industry that by 2025 would be worth more than $15 billion and host five world-leading chip manufacturing companies.
According to the local government, Lin-gang has already attracted over 40 semiconductor companies to set up offices or factories. The firms range from chip design startups like Cambricon and Horizon Robotics, to chips and key material manufacturers.
In the inter-provincial race to dominate China's domestic semiconductor industry, Shanghai is mostly competing with its neighboring province Jiangsu, which has long produced the most chips among all Chinese provinces. Shanghai, a city whose government has the status of a province, ranked fourth in 2020.