China’s Auto Industry Stagnates Due to Chip Shortage

By Shawn Lin
Shawn Lin
Shawn Lin
Shawn Lin is a Chinese expatriate living in New Zealand. He has contributed to The Epoch Times since 2009, with a focus on China-related topics.
July 1, 2021 Updated: July 1, 2021

The world is currently experiencing computer chip shortages and China is no exception. China’s lagging semiconductor manufacturing business has become a long-term barrier for its auto industry.

China held its Automotive Industry Summit, the “2021 China Automotive Forum,” in Shanghai from June 17 to 19. The forum focused heavily on how to solve the chip crisis, as the themes were “Automotive Chip Shortage” and “China’s Countermeasures.”

Public data shows that China’s semiconductor manufacturing capability is currently only 15 percent self-sufficient, and automotive chip manufacturing is only 5 percent self-sufficient. China’s weak domestic semiconductor industry results in an import rate of automotive chips as high as 90 percent.

Automobiles worldwide have become more intelligent, with emphasis on AI, connectivity, and electric power. Reports show that a standard vehicle is now equipped with more than 1,400 chips. As the industry advances, the demand for chips will only be greater.

The Chinese regime has repeatedly emphasized the need to “establish its autonomous automotive-grade chip manufacturing industry.” But with chips being the core component of automobile intelligence, China’s struggle to meet its demand has stagnated its automobile industry even further.

“The chip industry is the crystallization of the most advanced technologies from many countries in the world. If any one of them is missing, the global semiconductor industry chain will break. No country in the world can independently manufacture chips, not even a country as powerful as the United States,” said Dakang, an Auckland, New Zealand-based Chinese commentator and news analyst. “You may steal individual technologies, but can you steal the overall foundation [of the integrated technology]?”

Due to the CCP virus pandemic, U.S. sanctions, and China’s mobile phone manufacturers hoarding chips, there is currently a chip shortage worldwide. The automobile industry accounts for a large portion of the world’s economy. Among the sectors affected by the chip shortage, the automaker industry is one of the most severely impacted.

Shawn Lin is a Chinese expatriate living in New Zealand. He has contributed to The Epoch Times since 2009, with a focus on China-related topics.

Shawn Lin
Shawn Lin
Shawn Lin is a Chinese expatriate living in New Zealand. He has contributed to The Epoch Times since 2009, with a focus on China-related topics.