Chinese Semiconductor Industrial Policy : Prospects for Future Success

This paper, the second in a two-part series analyzing the Chinese semiconductor industry, attempts to answer two questions: First, why — in spite of 70 years of industrial planning efforts — can’t China make advanced semiconductors on par with the worldwide industry leaders? Second, what are China’s prospects for success with its current semiconductor industrial plans? This paper reviews the development of the semiconductor industries in Taiwan, Japan, and South Korea in the context of literature on latecomer strategies and compares their development with China’s efforts. The paper also considers China’s prospects for success. China’s current plans are well defined, with national champions focusing their efforts on targeted subsectors of the industry, but these efforts will not achieve their desired success due to a lack of human capital and intense international competition.The first paper from this two-part series can be found at https://ssrn.com/abstract=3441951