China’s chip leaders bank on AI, EVs, RISC-V as industry’s future growth engines
News Summary
At the 2025 Global Semiconductor Market Summit, Chinese chip executives identified strong demand from artificial intelligence (AI) and electric vehicles (EVs) as key drivers for the development of mainland China's semiconductor industry. Wu Jian, vice secretary general of the Jiangsu Semiconductor Industry Association, stated that AI, memory, and automotive chips have become the main growth engines for the domestic chip-design sector, fueled by the global AI frenzy and China's booming EV industry. However, he also highlighted the critical bottleneck in China's advanced chipmaking: a fragmented production landscape, with 189 wafer production lines yielding a combined capacity of just over 6 million wafers per month, significantly trailing global leaders like TSMC and SK Hynix. Despite being denied access to advanced chips from Nvidia and leading-edge fabs from TSMC due to US tech rivalry, China is betting on RISC-V, a new chip architecture, to empower its industry. Official data shows China's total integrated circuit (IC) output expanded by 10.2% in the first 10 months of 2025 to 386.6 billion units, with October alone seeing a 17.7% increase. Concurrently, IC imports rose by 8.5% to 493.8 billion units over the same period.
Background
The current US-China tech rivalry in semiconductors is intensifying, with the US government (under President Trump) continuing to impose export restrictions on China's access to advanced chip technology and manufacturing equipment. These measures aim to curb China's technological advancement and address national security concerns, compelling China to prioritize semiconductor self-sufficiency and explore alternative technological pathways. RISC-V, an open-standard instruction set architecture, offers a potential avenue for China to reduce its reliance on proprietary Western chip designs (such as ARM and x86) and cultivate an independent chip ecosystem. Concurrently, the burgeoning global demand for AI chips and the rapid expansion of China's domestic electric vehicle market are providing significant market impetus and development opportunities for its domestic semiconductor industry.
In-Depth AI Insights
To what extent can China's “bet” on RISC-V effectively address the advanced chip chokepoints imposed by US restrictions? - RISC-V offers a foundation for an independent chip ecosystem, but it does not, by itself, resolve manufacturing bottlenecks. China still lacks critical advanced lithography equipment and expertise required to produce leading-edge chips (7nm and below) at scale. - While RISC-V can facilitate domestic chip design, the core challenge remains fabrication capability and yield. This strategy is inherently long-term and carries significant execution risk. What are the realistic investment implications for global semiconductor firms, particularly those involved in advanced manufacturing or IP, given China's push for self-sufficiency? - For advanced manufacturing equipment suppliers (e.g., ASML) and IP companies (e.g., ARM), while short-term revenue volatility in the Chinese market might persist, China's long-term investment in domestic alternatives will stimulate the rise of local competitors and potentially accelerate technological divergence. - The global semiconductor supply chain will continue to “de-risk,” potentially leading to supply chain redundancies and increased costs, but also creating new avenues for collaboration and market opportunities, particularly in non-leading-edge technologies and mature processes. What deeper contradictions and investment opportunities are revealed by China's increasing chip output alongside persistently high imports? - The coexistence of rising output and high imports indicates significant progress in China's mature process chip production, while the substantial demand for and technological dependence on advanced chips remain unresolved. This highlights a structural contradiction between 'quantity' and 'quality'. - Investment opportunities likely reside in domestic Chinese suppliers of mature process equipment and materials (e.g., 28nm and above), as well as in chip design companies focused on specific application areas like AI and EVs, which can capitalize on strong domestic market demand.