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January 21, 2017

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New chip plant to cut foreign tech need

CHINA’S largest chipmaker has said it will invest US$30 billion to build a new semiconductor factory, as the world’s second-largest economy seeks to reduce its dependence on foreign technology.

The state-owned Tsinghua Unigroup will open the facility in Nanjing, capital of Jiangsu Province, where it will mainly produce chips used in consumer electronics such as cellphones, cameras and computers, said a statement posted on the company’s official website.

The project “is of great significance to the independent innovation, large-scale production, and marketization of China’s integrated circuit industry,” the statement said.

The announcement comes after attempts by the company to take over US chip makers Micron Technology and Sandisk were curbed by the Committee on Foreign Investment in the United States over national security concerns.

Its ambitions to acquire American technology thwarted, Tsinghua Unigroup has shifted its focus to building plants in China, launching a US$24 billion memory chip factory in Wuhan last month, according to online news site Sohu.

China was the largest market for semiconductors in the world in 2015. Its excessive dependence on imported chips has raised concern in Beijing over the country’s national security, according to a report by the US Department of Commerce.

In 2014, Chinese authorities pledged 100 billion yuan (US$14.6 billion) to support the industry, with the aim of building a “globally competitive semiconductor sector by 2030,” according to two statements by the Ministry of Industry and Information Technology in 2014 and 2015.

In a speech on cyber security in April, President Xi Jinping said China must gain control of “core” technology.

The drive by China to expand its role in the market, long dominated by US firms like Intel and Qualcomm, has raised concerns in Washington.

A report to US President Barack Obama by a presidential science panel last month warned that China is set to challenge US dominance in the industry.



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