China Has Painted Itself Into a Semiconductor Corner

Tim Culpan, writing at Bloomberg: As Washington embarks on a multi-billion dollar, decade-long semiconductor development campaign, Beijing is reckoning with its own 20-year effort that's largely failed to deliver. Both will need to grapple with wasted funds and misguided goals as they play catch-up to Taiwan and South Korea. Architects of China's ambitious efforts may be facing the music for having not produced world-beating technology, Bloomberg News reported this week. Multiple corruption probes announced by authorities stem from anger among the nation's top leaders over an inability to develop semiconductors that could replace American components, it reported. Two of the most scrutinized areas are the $9 billion bailout of Tsinghua Unigroup Co., and the National Integrated Circuit Industry Investment Fund -- known as the Big Fund.

For all intents and purposes, China has failed to achieve its semiconductor goals, and those tasked with realizing them are being brought to account. Beijing won't be smarting at the loss of money -- it's been willing to burn cash -- but at the lack of progress such expenditure was supposed to buy. Those looking at China's achievements are mostly finding what they seek, and ignoring the rest. Semiconductor Manufacturing International, for example, got a lot of attention recently when industry analysts TechInsights wrote: 'SMIC has been able to fabricate features that are small enough to be considered 7nm.'

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