China's Quest for Semiconductor Self-Sufficiency

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## Abstract

This CETaS Briefing Paper explores China’s quest for semiconductor self-sufficiency and its implications for the UK and Korean semiconductor industries. Building on [an April 2024 CETaS Research Report](https://cetas.turing.ac.uk/publications/semiconductor-supply-chains-ai-and-economic-statecraft) that analysed UK-Korea cooperation on semiconductors and AI, this paper focuses on intellectual property and chip design, compound semiconductors, high-bandwidth memory chips, mature-node vulnerabilities and policy coordination. The authors’ recommendations include initiatives to: develop more detailed contingency plans in the event of Chinese oversupply in the mature-node chip market; establish a verification framework for enhanced chip security; and combine the UK’s strengths in design and IP with Korea’s strengths in manufacturing and memory devices. If the UK is to address its shortcomings in the semiconductor industry, it will need to deepen its collaboration with countries such as Korea. Much of this collaboration should focus on optimisation – a key success factor in the sector, affecting every link in the value chain.

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## Executive Summary

This CETaS Briefing Paper examines how China’s quest for semiconductor self-sufficiency will affect the UK and Korean semiconductor industries. The paper builds on an April 2024 CETaS Research Report that assessed the ways the UK and Korea could bolster cooperation between their semiconductor and AI industries for mutual benefit.

Since October 2022, US-led export controls have explicitly targeted the Chinese chip industry, seeking to starve it of the critical components needed to accelerate progress in artificial intelligence (AI) and military innovation. These measures, while partly successful in slowing China down in the short term, have further emboldened Beijing in its quest for self-sufficiency and dominance in numerous parts of the semiconductor supply chain. Commentators have debated China’s strategic options for achieving its economic and political goals in a chip-deficient environment, but there is a need for greater focus on the second-order effects of China’s domestic ambitions on countries such as the UK and Korea. Despite not being at the forefront of ongoing US-China export control disputes, they still risk being caught in the crossfire of retaliation and deepening protectionism.

China’s desire for semiconductor self-sufficiency predates recent geopolitical wrangling – the Made in China 2025 policy was instituted in 2015, paving the 

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