China's ambitious goal is to achieve a 40% IC self-sufficiency by 2020, but there are still specific obstacles on the way.

China is trying to progress become less reliant on foreign supply of semiconductors. The largest consumer of integrated circuits (ICs) announced in 2015 the "Made in China 2025" plan, setting a strategic goal to grow the country’s IC industry to achieve a self-sufficiency rate of 40% by 2020, increasing to 70% by 2025. However, according to the 2018 National Imported Key Commodity Value Index, published by the State General Administration of Customs, China imported 417.57 billion integrated circuits in 2018, with a total amount of RMB 2058.41 billion (US $312 billion), an increase of 19.8% over 2017.

Chinese IC industry executives discussed the issues the country is facing during a recent roundtable event called "Countdown: How Far is China from 40% IC Self-Sufficiency?" held during the 2019 China IC Leader Summit.

EETimes.com has a detailed report of the discussions held at the event.

The basic concerns outlined by Chinese executives have to do with the lack of internal sources for basic device IP, electronic design automation (EDA) tools, and semiconductor manufacturing equipment. Here are some basic bottlenecks that should be solved, some facts and some proposals, as they were discussed:

• Supply of memory products
• 99% of microcontroller (MCU) is in the hands of international manufacturers
• China's entire IC industry is still catching up with market leaders, with a few exceptions that include Huawei (communications)
• Improving the level of analog technology and quality control
• Each company must set its own goals, upgrade their own competitiveness, continuously evolve and develop
• Cooperation among Chinese electronics companies - design, manufacturing, packaging, testing, to materials
• Look for opportunities at the “edges” of markets i.e smart audio and wireless headphones
• Achieve leadership in a certain fields. Application drivers could be an advantage for the Chinese electronics industry. China could leverage its huge internal market to set worldwide trends and standards. Future applications include areas such as smart cities, healthcare, home appliances and industrial control.
• Although basic algorithms for AI are in the hands of the United States, China's large number of home appliances and system manufacturers can provide many improvements for China's AI algorithm and chip design.
• China’s electronics industry has developed some IP, it is still lagging far behind its international competitors. Video transcoding in the cloud and network chips are exceptions.
• Forming clusters could be an efficient way to create self-sufficiency in a market — make the market more concentrated and encourage the creation of a home-grown talent pool, which will promote the IC industry, including IP development.
• 95% of China's EDA market is controlled by foreign enterprises.
• Currently, Chinese companies are giving priority to foreign products because they are mature and easy to use.
• To develop China's EDA, strong cooperation with domestic OEMs is required.
Foreign manufacturers started 60 years ago and have developed through hundreds of mergers and acquisitions. It is unrealistic to expect China can become competitive in EDA in three years.
• China's semiconductor equipment is far from the world's advanced level, but it is becoming competitive.Key to localization of equipment is the collaboration of upstream and downstream of the industrial chain. Downstream, Chinese IC manufacturing enterprises have to be willing to use equipment made by domestic suppliers.
  
• The competition in the semiconductor industry is a competition of talent.
• Huawei has always been regarded as one of the most attractive Chinese companies for talent and its salaries are comparable to international giants.
• Chinese government is subsidizing certain industries to invest. Some companies use the funding in order to pay competitive salaries. Companies should not rely on the state to pay for the salaries, but invest in R&D.
• China is not producing enough top-rank engineers to fulfill its own needs. China’s Internet companies are making a lot of money, which means they can pay high wages. IC companies cannot always offer competitive salaries, however, which puts them at a disadvantage when trying to attract top talent.
• Lack of sufficient protections for IP. Companies and individuals want assurance they will be able to profit from their innovation, so that they can afford to offer competitive salaries.
• If local companies can't offer the same salary as Internet and AI companies, they can't attract local talents in IC industry.