Xi Jinping's 'Made In China' Ambitions Stuck In Mud On Sweeping US Chip Export Bans

In a major setback for the Xi Jinping administration, the U.S. sweeping export bans imposed last year are holding up expansion plans for top Chinese chipmakers.

What Happened: The government’s ambitions to make the country a semiconductor powerhouse are in the doldrums as the chipmakers struggle to source manufacturing gear for making advanced semiconductors, reported Nikkei Asia.

The engineers and technicians at the massive flagship production site of Yangtze Memory Technologies (YMTC) are waiting for its second plant to operate. It was originally slated to start in late 2022, but the sweeping curbs delayed plans. 

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“Things like electrical equipment have been set up, but the installation of chipmaking equipment hasn’t started yet,” one said.

The company in 2020 had established a second factory – at an estimated cost of around 100 billion yuan ($15 Billion) – to triple production capacity and meet the government’s wide ambitions to make China a chipmaking hub. 

However, Washington’s broad, stringent curbs on exports of technology and gear for making advanced semiconductors, along with restrictions on U.S. nationals providing support to Chinese chipmakers, has now kept them waiting. 

The curbs have also forced YMTC to cut jobs. “Our department started layoffs in January of around 10% of its staff,” said an engineer working at the company for about three years. 

ChangXin Memory Technologies – maker of DRAM chips – which also uses advanced technology covered by the sanctions, is facing a wrench thrown into its plans. The company also set up a second unit but the operations remain uncertain. 

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“We planned to begin operations in 2023, but it won’t happen until 2024 or 2025 at the soonest,” said a CXMT engineer.

In 2015, President Xi announced the “Made in China 2025” initiative, which positioned semiconductors at the heart of it. Although the industry has made rapid growth since the announcement, the recent tensions between the U.S. and China are visibly taking a toll on the chip sector.