Author: Falan Yinug
Feedback/Comments: falan.yinug@usitc.org
Date published: May 2009
This article seeks to explain the limited level of high-tech
semiconductor production by foreign investors in China. First,
the article briefly summarizes the evolution and current state
of China’s policy efforts to promote foreign investment in its
semiconductor industry. Second, the article shows that foreign
front-end semiconductor production in China remains
relatively small, despite the lure of the government’s
promotional policies and the fact that China is the world’s
largest market. The article concludes by identifying two major
factors discouraging foreign front-end semiconductor
production in China: (1) China’s uncertain business
environment for front-end semiconductor production,
punctuated by lax intellectual property rights (IPR) protection
and enforcement; and (2) restrictive investment and export
control policies by foreign governments.
