Global chip sector needs open markets to grow

SHANGHAI -- The future growth of the local chip industry could be undermined if some countries limit market access amid a surge in protectionist sentiment across the world, President and Chief Executive Ajit Manocha of Semiconductor Equipment and Materials International, an industry association, said Thursday.

"Collaboration is the key," Manocha told reporters on the sidelines of SEMICON China, a semiconductor industry forum held in Shanghai. "So far the success of the semiconductor industry is because of the openness."

"But if we limit market access, that would probably create problems for future growth of the industry," he said.

SEMI President and CEO Ajit Manocha, right, and SEMI China President Chu Lung (Photo by Cheng Ting-fang)

Manocha previously served as chief executive of Globalfoundries, the world's second largest contract chipmaker in the U.S. after Taiwan Semiconductor Manufacturing Co. Prior to that, he held senior executive positions at Dutch chipmaker NXP.

Manocha's comments came a day after Chinese executives said that China must develop its own technology sector and lure talent rather than rely on mergers and acquisitions to expand. China has been facing barriers in acquiring foreign chip companies to close the technology gap with international leaders such as the U.S., Japan, South Korea and Taiwan.

These countries see China's buyout efforts as significant threats to their industry development and national security, and have been blocking Chinese offers for their tech companies.

China has been aggressively fostering its own semiconductor sector in order to reduce dependence on products provided by foreign companies such as Intel, Qualcomm, Micron, Samsung Electronics, SK Hynix, TSMC, MediaTek, and Toshiba.

Chu Lung, president of SEMI China, dismissed the notion that Chinese chip designers and makers can compete with global players now. "China is not trying to beat anyone or gain any advantage from any companies. These Chinese companies just want to join the ecosystem and to meet their own needs economically," said Chu.

Chu added that it was inevitable China would grow its own chip industry as the country, with a population of 1.3 billion, is buying an exorbitant amount of semiconductor products.

The annual SEMICON China fair has become one of the most important industry events as China's chip sector is seeing yearly revenue growth of more than 20%.

This year, more than 60,000 attended the event and close to 1,000 semiconductor suppliers exhibited their wares.