Technicians work in a workshop of Wuhan Xinxin Semiconductor Manufacturing Co., Ltd (XMC) in Wuhan Donghu New Technological Development Zone in Wuhan, capital of central China's Hubei Province, Feb. 14, 2020. (Photo: Xinhua)

Amid an investment boom in China's integrated circuit industry, the country's top planner, the National Development and Reform Commission (NDRC), is warning local governments of potential risks and requesting that they avoid blind investments, vowing to strengthen the layout of the industry and guide industrial development in an orderly way.

Responding to media reports of unfinished chip projects within China, NDRC spokesperson Meng Wei said that, due to the investment boom, some inexperienced enterprises lacking technology and talent have joined the integrated circuit industry. 

A number of local governments also lack an adequate understanding of the industry's laws of development, leading them to invest in and approve chip projects blindly. "This risks leading to the construction of low-level or duplicate chip manufacturing plants," Meng noted, adding that some projects were already stagnant and factories sat empty. 

The NDRC will ask local governments to be held accountable if such projects result in huge losses or invoke big risks, she said.

As China races to resolve the bottlenecks in its chip industry due to recent US restrictions, the industry has attracted much attention and investment in recent years. In 2019, the sales revenue of China's integrated circuit industry hit 756.23 billion yuan, up 15.8 percent year-on-year. 

Global Times