Chip Photo: VCG

As the global semiconductor market recovers, recent earning results from Chinese semiconductor companies have shown improving performances in the first half of 2024. To break an intensifying US stranglehold, it is crucial for Chinese semiconductor industry to enhance its capabilities to seize global industrial upturn opportunity.

A-share semiconductor company BIWIN Storage Technology achieved a net profit attributable to the owner of the parent company of 280 million ($38.56 million) to 330 million yuan in the first half of the year, a year-on-year increase of 194.44 percent to 211.31 percent, according to company filings.

Southchip Semiconductor Technology Co achieved a net profit attributable to the owner of the parent company of 203 - 221 million yuan in the first half of the year, a year-on-year increase of 101.28 percent to 119.16 percent.

The rapid growth of Chinese semiconductor companies is partly due to the industry's cyclical upward trend in the world. In June, the World Semiconductor Trade Statistics (WSTS) raised its forecast for the year-on-year growth rate of the global semiconductor market this year to 16 percent. According to the WSTS, the global semiconductor market is expected to reach $611.2 billion in 2024.

Despite facing challenges from the escalating "small courtyard with high fence" blockade by the US, the growth in the performance of Chinese semiconductor companies is very encouraging news. More importantly, it is crucial to seize the opportunity of the global semiconductor industry's upturn and accelerate their development.

Admittedly, the continuous tightening of export restrictions to China by the US government on Chinese and other countries' chip companies and equipment manufacturers are squeezing the development room of the Chinese semiconductor industry. In the face of such unfair external environment, it is necessary to objectively analyze the reasons for growth in order to achieve greater breakthroughs in sector development.

Chinese semiconductor companies have indeed seen a significant increase in production capacity during recent years. Industrial observers predict that Chinese semiconductor production capacity will grow by 40 percent in the next five years. Australian media ABC News reported in February that leading Chinese companies in semiconductor design and manufacturing, such as HiSilicon and SMIC, are "impressing" Washington.

Nevertheless, it should be seen that the global semiconductor industry shows that the market demand for mid-to-high-node markets is higher than for low-node products, with increasing competition for simple, homogeneous low-node products. For the Chinese semiconductor industry to seize the opportunity in this cycle, the key lies in how to make a breakthrough in making high-end microchips.

Especially in the context of the US exhausting all means to stifle China's semiconductor industry, Chinese companies needs to further improve their research and development capabilities, enhance industrial efficiency, and sharpen its core competitive edge, and achieve crucial innovation breakthroughs. Also, the US is pushing the Netherlands and Japan to impose new restrictions on supplies to China's semiconductor industry, according to media reports.

After the Western attempts to discredit and stifle the semiconductor industry in China failed to achieve the desired effect, they have now chosen to smear and demonize it, attempting to portray China's efforts as a threat. They have claimed that the rapid development of China's chip industry may change the global economic and security landscape, which is utter nonsense. 

This kind of Western viewpoint is unreasonable and unacceptable. China's development of its own semiconductor industry is a legitimate right, and no one has the right to smear or slander China's semiconductor development. The malicious intent to restrict China's semiconductor industry development will be as futile as their efforts to stifle and suppress it. 

China's semiconductor industry is confident in overcoming this unfair external pressure and achieving more breakthroughs in tech innovation. There is increasing evidence that Chinese companies are ramping up efforts to develop high-end microchips. This effort represents that Chinese semiconductor companies have found the right direction and they will get to realize their targets soon. 

The author is a reporter with the Global Times. bizopinion@globaltimes.com.cn