re-globalisation in semiconductor industry should emphasise cooperation, not division of labour

context: China faces increasing isolation from cutting-edge semiconductors and the requisite materials for their production. This has fueled a major push for domestic substitution to achieve tech self-reliance. 

China should spearhead the re-globalisation of the semiconductor industry, argues Wei Shaojun 魏少军 Tsinghua University professor. Compared to the initial globalisation of the industry, re-globalisation should emphasise cooperation, rather than division of labour, Wei asserts. In practice, he says, this could mean granting foreign enterprises access to China's vast AI applications market.

Wei highlights a pervasive psychological unease concerning the semiconductor sector, which he attributes to both the countries imposing sanctions and those being sanctioned. This has sparked calls for comprehensive chip laws in almost all major economies, he notes.

The global semiconductor industry was fundamentally based on a separation of design, manufacturing and packaging, he explains. Recalling discussions on the integrated or separated models around 20 years ago, he asserts that the true value of the globally integrated model is only becoming visible amidst current fragmentation. China’s development benefited from globalisation, Wei believes; hence, damaging globalisation damages China. 

Industry itself has a much deeper understanding of the value of globalisation compared to politicians, Wei says. The recent joint venture between Dutch STMicroelectronics and Chinese San’an Optoelectronics in Chongqing is a case in point, he believes.