China on Quest for Semiconductor Independence.

• Author: Tadjdeh, Yasmin
• Position: Algorithmic Warfare

Semiconductors are the backbone of the modern electronics that make up some of the world's most promising and revolutionary technology. However, countries around the globe are increasingly concerned about malicious hidden backdoors that can expose systems to security breaches, leading some to seek more oversight and supply independence.

China has been one of the most vocal nations to pursue greater autonomy over its semiconductors. Beijing has said it intends to significantly ramp up investment in the development of its own indigenous industry, noted a recently released Center for Strategic and International Studies report titled, "Learning the Superior Techniques of the Barbarians: China's Pursuit of Semiconductor Independence."

The February report--penned by James A. Lewis, senior vice president and director of CSIS' technology policy program--noted that Beijing is currently a net importer of semiconductors.

"China wants to move 'up the value chain' from assembling final products from imported components to creating advanced technology in China itself, but imports of chips and technology will be the norm for many years to come," the report said.

Currently, only 16 percent of China's semiconductors are produced in-country. The nation wants to produce 40 percent of the semiconductors it uses by 2020 and 70 percent by 2025, the paper added.

"Given past Chinese practice, we can safely assume that if China achieves a dominant position in semiconductors it will use it for intelligence, military, commercial and political advantage," it said.

However, just because Beijing has said it intends to grow its industry doesn't mean that the world should necessarily take it seriously, the report said.

"China routinely cranks out economic plans," it said. "What counts is not the plan but the money. The total planned investment in semiconductors is $118 billion over five years, including $60 billion from provincial and municipal governments."

Western companies already invest billions of dollars yearly on such technology and breaking into the semiconductor market is no easy task, Lewis noted.

"China spent billions of dollars in earlier decades to create a domestic semiconductor industry but with little success," the report said. "The chief difficulty for Chinese firms is not access to equipment but their lack of experience and 'know-how.' This continues to be a problem."

Jimmy Goodrich, vice president for global policy at the Washington, D.C.-based...