Workers of HC Semitek, a leading Chinese LED chip maker, produce chips at its subsidiary in Yiwu in East China's Zhejiang Province. (Photo: Yang Hui/GT)

A semiconductor industrial park in Central China's Hunan Province recently announced the start of construction, as part of the latest efforts by Chinese companies to extricate the industry from heavy reliance on foreign semiconductors, while the US turns up the heat against Chinese companies by imposing restrictions on chip makers. 

Taking up an area of about 1,000 mu (666,667 square meters), the semiconductor and integrated circuit research and development and industrialization base located in Changsha, Hunan Province, began construction on Monday.

It is reportedly the biggest industrial park for semiconductor and integrated circuit R&D in the province, with investment exceeding 16 billion yuan ($2.2 billion). 

The industrial park will be constructed into a base mainly for producing silicon carbide (SiC) and chips with proprietary intellectual property rights, according to news site Chinanews.com.

Previously, Shanghai had built a large semiconductor, integrated circuit and chips industrial base, with investment reaching more than 160 billion yuan. Since its listing on August 20, 2019, the industrial base in Shanghai's Lingang New Area has signed a total of 289 industrial projects, involving a total investment of 252.8 billion yuan.

Xiang Ligang, a Chinese telecoms industry analyst, told the Global Times on Wednesday that China's expansion of industrial parks for semiconductor and chips production is a response to foreign restrictions on Chinese buyers and will bring the Chinese chip industry closer to self-manufacturing capability.

With such huge amounts of investment and strong support from the local government, Xiang believed these bases will gain momentum for Chinese companies including startups devoted to the R&D of semiconductors, integrated circuits and chips. 

The US has been stepping up its restrictions against Chinese companies, including Huawei, by limiting the use of US technology in designing and producing semiconductors, which has prompted many to question whether domestically made semiconductors industries can prop up China in this field.

With broad market demand and as a strategic industry supported by the state, the Hunan project is focused on solving problems for Chinese companies in chip materials and design, and China's heavy reliance on foreign manufacturers, said Lin Kechuang, general manager of San'an Optoelectronics Company, at the groundbreaking ceremony on Monday. 

The industrial park in Hunan is expected to complete its first phase of construction and go into operation within two years, and achieve a certain production capability within six years. The project seeks to achieve an annual output value of 12 billion yuan, drive the output value of supporting industries to over 100 billion yuan and at the same time create 12,000 jobs, reports said.