Commentary: Two Systems May Emerge as Global Chip Supply Chain Fractures
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Editor’s note: The following is an edited version of a keynote speech titled “Semiconductors and China’s Next Industrial Revolution,” delivered by Wei Shaojun, Professor at Tsinghua University and IEEE Fellow, at the inaugural Caixin CG Capital Forum on Sept. 11 during the Asia New Vision Forum in Singapore.
China’s semiconductor sector is already established in several cities and regions — Beijing, Shanghai, Guangzhou and the central and western parts of China. Beijing and Shanghai are the central industrial centers for semiconductors. The Pearl River Delta region is also booming and relatively well-developed, while the central and western regions host our memory technology bases. For example, companies like Yangtze Memory Technologies Co. Ltd. and ChangXin Memory Technologies Inc. are located near the Yangtze River.
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- China is the only country besides the U.S. with a full semiconductor industry chain, and has seen rapid growth, with local fabless sector revenue reaching 646 billion yuan ($90.7 billion) in 2024.
- China’s global share of integrated circuits grew from less than 1% in 2004 to 14.5% in 2023, but half of domestic chip demand remains reliant on imports.
- U.S.-led export controls and global supply chain fragmentation have intensified, pushing China to increase self-reliance in semiconductors.
[para. 1]
- Yangtze Memory Technologies Co. Ltd.
- Yangtze Memory Technologies Co. Ltd. (长江存储科技有限责任公司) is a Chinese memory technology company. It is located near the Yangtze River, in one of China's central and western regions dedicated to memory technology bases.
- ChangXin Memory Technologies Inc.
- ChangXin Memory Technologies Inc. is a Chinese memory technology company. It is located near the Yangtze River, a region designated as one of China's memory technology bases.
- Nvidia Corp.
- Nvidia Corp. contributed to the U.S., Canada, and Mexico surpassing China as the largest semiconductor market by value in 2023 due to its strong revenues.
- After World War II：
- The U.S. and its allies established COCOM to restrict export of critical materials and technologies to socialist countries.
- 1990s：
- COCOM was replaced by the Wassenaar Arrangement, which continued to limit exports of key technologies to China.
- 2014：
- By this year, China became the world’s largest semiconductor market by value.
- During the Obama administration (2009-2017)：
- U.S. officials publicly stated their intention to curb China’s development.
- 2018：
- President Donald Trump began to contain China’s technology development; Chinese semiconductor industry started a period of sustained growth despite external pressure.
- 2018：
- China's fabless semiconductor sector sales revenue was 252 billion yuan.
- 2018：
- China's OSAT sector and chip manufacturing sales revenue were notably lower (compared to 2024 figures).
- 2018：
- The number of local Chinese semiconductor suppliers doubled by 2025, as compared to this year.
- 2018-2024：
- China’s fabless sales revenue experienced a 17% CAGR, OSAT sector 6% CAGR, and chip manufacturing 16% CAGR.
- 2024：
- China's fabless sector sales revenue reached 646 billion yuan ($90.7 billion).
- 2024：
- China's OSAT sector sales reached 313 billion yuan.
- 2024：
- Chip manufacturing sales in China reached 444 billion yuan.
- 2024：
- U.S., together with Canada and Mexico, overtook China as the world’s largest semiconductor market by value.
- 2024：
- China's local integrated circuit global market share reached 14.5%, up from less than 1% in 2004.
- 2024：
- After six years since Dominique de Villepin's 2018 statement about a 'world with two systems,' the prediction is acknowledged as accurate.
- February 2025：
- Michael Krazios, director of the White House Office of Science and Technology Policy, commented on China as America's most formidable technological and scientific competitor.
- As of 2025：
- The share of indigenous chips used in China's domestic market is about 50%; reliance on foreign suppliers remains.
- As of 2025：
- All six members of the World Semiconductor Council have introduced their own 'Chip Acts' or national semiconductor strategies.
- Under the Biden administration (By 2025)：
- The U.S. coordinated with the Netherlands, Japan, and South Korea to restrict exports of critical semiconductor technologies to China.
- Sept. 11, 2025：
- Wei Shaojun delivered a keynote speech at the inaugural Caixin CG Capital Forum during the Asia New Vision Forum in Singapore.
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