Flagship Chinese Chipmaker Collapses Before It Makes A Single Chip Or Opens A Factory

One of China’s next-generation chipmakers appears to have collapsed, potentially hampering the nation’s march to silicon-self-sufficiency.

Chinese electronics industry journal Jiwei reported that Wuhan Hongxin Semiconductor has contacted its staff and told them the organization won’t attempt to continue building its facilities nor develop products.

The company aspired to offer microchips on 14nm and 7nm process nodes, and had acquired some of the equipment needed to make such products. However, the firm struggled to build its factories amid disputes with construction contractors and local authorities over development permits.

Difficulty accessing cash was another issue.

Those troubles led the Wuhan government to take over the outfit in November 2020, though that intervention appears not to have had a positive effect.

China wants to become self-sufficient in silicon, because it likes the idea of having its own technology stack and as US sanctions are restricting its ability to build the chips it needs to fuel its 14th five-year plan. That plan calls for wider use of analytics and big data to fuel growth.

China’s largest established chipmaker, SMIC, recently admitted that US sanctions on technology exports will mean it may struggle to output components on a 10nm node. Japanese outlet Nikkei yesterday reported that Chinese firms are increasingly aggressive in pursuit of second-hand chipmaking kit as they seek to evade US sanctions.

The demise of Wuhan Hongxin Semiconductor is therefore unwelcome as it will mean delays in growth of China’s production capacity.

Jiwei's report adds that the collapse of the company is so comprehensive that staff may not receive severance pay. ®