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China Aims to Become World’s Leading Chipmaker

China Heavily Penetrates Chip Business

by Yaroslav Lyssenko

[ 01/13/2005 | 04:26 AM ]

After becoming the world’s primary source for manufacturing of electronic equipment, China is looking forward to turning into the global center for semiconductor manufacturing. Today the country’s government subsidizes the local chipmakers heavily, which allows those companies to offer large price advantages to customers.

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“China produced about $2.4 billion worth of chips last year. In 2003, it accounted for 4% of world production. But by 2007, it should more than double that, to 9%. And this could be conservative. China’s market-share gains are expected to increase this year, with global demand for chipmaking capacity growing a lot more slowly than in 2004. As that happens, foundries will compete even more on price, where the Chinese, with lower labor costs and government subsidies, have an advantage,” claims an article over BusinessWeek Online.