China Requires Automobile Manufacturers to Increase the Proportion of Domestic Chip Procurement
In order to strengthen its semiconductor supply chain, the Chinese government has announced that it requires Chinese automakers such as BYD to expand their procurement of domestic chips and increase the proportion of domestic automotive chip procurement to 25% by 2025.
On the 16th, Nikkei News reported that the Chinese government has requested major domestic automobile manufacturers to increase the proportion of domestic automobile chip procurement to 25% by 2025. China's goal is to become an "automotive powerhouse," but the proportion of domestic automotive chip procurement is only about 10%. The Chinese authorities hope to increase the proportion of Chinese made chip procurement and accelerate the strengthening of their semiconductor supply chain.
According to reports, the Ministry of Industry and Information Technology, responsible for automotive industry policies, has requested Chinese automakers to increase the local procurement ratio of automotive chips to 20-25%. In addition to electric vehicle giant BYD, the required targets also include Shanghai Automobile Group, Dongfeng Automobile Group, Guangzhou Automobile Group, and China First Automobile Group. However, these requirements are not mandatory, but encourage car manufacturers to expand their procurement of domestically produced chips through incentives and other means. According to insiders in the automotive industry, the goal for 2025 is only transitional, and the ultimate goal is to achieve local procurement of all automotive chips.
The report points out that the confrontation between China and the United States in the semiconductor field continues to intensify. However, most of the manufacturing technologies used in automotive chips are not the most advanced and therefore are not included in the regulatory targets of the United States. This means that Chinese semiconductor manufacturers will be able to purchase manufacturing equipment from overseas and strengthen their business in the automotive sector,
At present, the global automotive chip market is dominated by companies such as TI from the United States and Texas Instruments, Infineon from Germany, NXP Semiconductor from the Netherlands, ST Microelectronics from Switzerland, and Renesas Electronics from Japan. However, it is expected that Chinese companies will use this measure to launch an offensive, which is expected to benefit from the aforementioned policies and increase orders from car manufacturers.
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