China's chip production falls again-EEWORLD

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China's integrated circuit (IC) output fell for the second consecutive month in October as a global chip production shortage led to supply bottlenecks, the latest government data released on Monday showed, according to the South China Morning Post.

China's integrated circuit output fell to 30.1 billion in October from 30.4 billion in September, after hitting a record high of 32.1 billion in August, the National Bureau of Statistics said, adding that chip output rose 22.2% year-on-year.

While China's IC statistics do not provide a detailed breakdown by product category, the overall output provides a rough measure of the country's efforts to reduce its reliance on imports and boost domestic semiconductor production, which has become a national priority as the country pushes for technological self-sufficiency.

Analysts said the declines over the past two months likely reflect disruptions to the global semiconductor supply chain. A recent report by Shanghai-based research firm ICWise showed that the lead time for chipmaking equipment, which refers to the time between an order being placed and the equipment arriving on the factory floor, has stretched to 12 months. The average delay has reached six months, hampering expansion plans for Chinese foundries.

Major mainland semiconductor foundries including Semiconductor Manufacturing International Corporation (SMIC) have been operating at nearly full capacity this year to keep up with high demand during the shortage.

SMIC said last week that plans to expand capacity were limited by logistical disruptions, extended delivery times and U.S. licensing requirements. SMIC co-CEO Zhao Haijun said the company's overall capacity increased to 594,000 8-inch equivalent wafers in the quarter ended September, up 32,000 from the June quarter.

As of the end of September, China had 33 eight-inch production lines planned and under construction and 41 12-inch wafer production lines, which could theoretically produce 1.13 million 12-inch equivalent wafers per month, ICWise's notes disclosed.

Governments around the world have been looking for ways to help ease the chip crisis, mainly by providing funding to the semiconductor industry. Supply chain integrity has been another concern for the industry. TSMC, the world's largest contract chipmaker, has been the main beneficiary of government encouragement to build facilities locally, which has also allowed them to build new foundries in the United States and plan to build a chip plant in Japan in a joint venture with Sony.

SMIC is currently building foundries in Beijing, Shenzhen and Shanghai, each focusing on the 28-nanometer technology node, with a total expected monthly capacity of 240,000 wafers. The Shenzhen plant is expected to start production in the second half of next year, Zhao Haijun said, adding that the plant's capacity has been booked in advance.

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