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Building China’s own chip industry will be a costly 10-year marathon, former Intel China MD says

A possible exodus of high-end manufacturing from China, triggered by the trade war, could put further pressure on the country as it tries to catch up

scmp.com, May. 29, 2019 – 

China's semiconductor industry needs more than a decade to catch up with global peers due to a weaker industrial base, and the US-China trade war only adds extra pressure, according to a Chinese semiconductor expert.

"This is an extremely challenging and brutal industry, heavily reliant on long term industrial accumulation," said Jay Huang Jie, founding partner of Jadestone Capital and former Intel Managing Director in China, speaking at a public event on Monday hosted by local think tank Our Hong Kong Foundation.

"China should be prepared for a marathon of at least a decade, which will also be loss-making [along the way]," said Huang, who left Intel in 2015 to establish his own investment firm focused on the semiconductor industry.

A possible exodus of high-end manufacturing from China, triggered by the US-China trade war, could put further pressure on the country as it tries to catch up. "It would be concerning if the high-end supply chain moves away from China after tariffs are raised. It won't happen overnight, but there's the possibility," Huang said.

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