Mass bankruptcies in China chip industry

It’s a spectacular number which is only understandable when China’s chaotic attempts to spawn a semiconductor industry are taken into consideration.

China offered such huge sums to chip companies that 22,000 new chip companies were registered in 2020 and another 15,700 were founded between January and May 2021, says Qichacha.

Many of these companies had no experience in the chip industry. They were merely a vehicle for getting the government money.

Now there’s a reckoning underway with eight senior officials who handed out the money under these schemes under investigation.

The extraordinary thing is that China ever thought this approach to growing a chip industry could work. Hundreds of thousands of its citizens work in the industry both in China and abroad, and most of them could have pointed out to the government that this was no way to tackle something so fiendishly complex as semiconductor manufacturing.