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$18.5 Billion Wuhan Chip Plant in Danger of Stalling

By Yang Ge / Aug 25, 2020 02:30 PM / Economy

Photo: VCG

Photo: VCG

China’s dreams of becoming a semiconductor powerhouse could be set for a fresh blow, with word that one of the nation’s most ambitious projects could grind to a halt at any moment.

That’s the assessment coming from a local government agency in the Central Chinese city of Wuhan, which was set to host a 128 billion yuan ($18.5 billion) logic chip maker called Wuhan Hongxin Semiconductor Manufacturing Co. Ltd. (HSMC).

The project already ran into trouble last November, when a local court suspended its right to use the land where it was building the plant amid a dispute with one of the engineering firms involved. Now an analysis released by the local government at the end of July is saying the project is suffering from a large funding shortfall that could bring it to halt at any time.

So, how big exactly is the shortfall?

According to the report the venture has yet to receive the lion’s share of its planned funding, or 112.3 billion yuan of the originally planned 128 billion yuan, to be exact, or to put it another way, that means that the roughly $2 billion that the project has received to date could end up going to waste.

One of the project’s biggest Achilles heels has been its inability to make it onto the national radar due to failure to complete land acquisitions, environmental impact reports and other necessary steps for its second phase. Landing on the national radar would instantly qualify it for huge government support in the form of billions of dollars Beijing is making available for such projects in a bid to lower China’s reliance on imported chips.

Read the full story on Caixin Global here.

Contact reporter Yang Ge (

Related: Major Chipmaking Project Suspended by Court Order

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