European and American semiconductor companies are significantly increasing investments in China, driven by the expanding NEV market and the need for resilient supply chains amidst geopolitical tensions. Firms like STMicroelectronics, Infineon, and NXP are adjusting their production strategies and actively forming partnerships with local companies in China to enhance operational efficiency and meet local demand.
Recent geopolitical tensions have led to increased uncertainty in the semiconductor market, prompting several European and American firms to strengthen their supply chains through investments in China. The burgeoning new energy vehicle (NEV) market in China has particularly attracted companies like Infineon, STMicroelectronics, and NXP, as they redirect focus amidst sluggish growth in Western electric vehicle markets.
Fabio Gualandris, president of manufacturing at STMicroelectronics, noted that producing chips outside of China could lead to missed opportunities in the country’s rapidly advancing electric vehicle sector. To remain agile and economical, firms such as Infineon are shifting portions of their production to Chinese foundries in response to escalating local demand for critical components.
In addition, international semiconductor firms are actively forming alliances with local Chinese companies to bolster their operations. For example, STMicroelectronics recently partnered with Hua Hong Semiconductor to manufacture 40nm microcontroller units, with production slated to commence by the end of 2025. Additionally, STMicroelectronics and Sanan Optoelectronics have established a joint venture focusing on silicon carbide (SiC) device technology, investing approximately USD 3.2 billion into this initiative.
NXP is also expanding its production capabilities in China, aiming to create a comprehensive local supply chain. With an established packaging and testing facility in Tianjin, NXP is exploring the potential for transferring frontend manufacturing processes to China. Furthermore, NXP inaugurated its AIoT Innovation Center, a fully online laboratory in China, underscoring its commitment to the market.
Investments by European and American semiconductor companies in China have been substantial, demonstrating a focused strategy to capitalize on local growth opportunities while enhancing supply chain resilience.
This article discusses the increasing investments made by European and American semiconductor companies in China, driven by the need to create resilient supply chains amidst geopolitical tensions. The focus on China’s new energy vehicle market has led to strategic partnerships and the establishment of local production facilities, reflecting a significant shift towards localized manufacturing and collaboration with Chinese firms.
In conclusion, European and American semiconductor giants are intensifying their investments in China, driven by the country’s influential NEV market and the need for supply chain resilience. Through strategic partnerships and localization of production, these firms aim to enhance their operational efficiency and tap into the growth potential offered by China’s rapidly evolving technology landscape.
Original Source: www.trendforce.com
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