{"id":357447,"date":"2026-03-25T15:09:13","date_gmt":"2026-03-25T15:09:13","guid":{"rendered":"https:\/\/www.newsbeep.com\/il\/357447\/"},"modified":"2026-03-25T15:09:13","modified_gmt":"2026-03-25T15:09:13","slug":"ai-boom-accelerates-chinas-chip-industry-growth-as-demand-strains-supply-chain","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/il\/357447\/","title":{"rendered":"AI boom accelerates China&#8217;s chip industry growth as demand strains supply chain"},"content":{"rendered":"\n<p class=\"yf-1fy9kyt\">By Eduardo Baptista<\/p>\n<p class=\"yf-1fy9kyt\">March 25 (Reuters) &#8211; China&#8217;s chip industry is showing strong growth momentum as a global sprint to build AI infrastructure creates an explosion in demand, sparking higher capital spending and \u200ccapacity expansion as chipmakers race to keep up, executives said on Wednesday.<\/p>\n<p class=\"yf-1fy9kyt\">Growth in the industry &#8220;is coming \u200cfaster than expected&#8221; this year, Jerry Zhang, China sales head at Swiss semiconductor components firm VAT, told Reuters on the sidelines of Semicon \u200bChina 2026 in Shanghai, one of the industry&#8217;s largest annual gatherings.<\/p>\n<p class=\"yf-1fy9kyt\">As companies race to ramp up production, China&#8217;s manufacturing capacity for chips made on mature 22nm to 40nm process nodes &#8211; used in cars, smartphones and electronics &#8211; is projected to reach 42% of global output by 2028, up from 37% in 2026, SEMI China President Lily Feng said.<\/p>\n<p class=\"yf-1fy9kyt\">CHIPS BECOMING \u200cMORE COMPLEX<\/p>\n<p class=\"yf-1fy9kyt\"><a href=\"https:\/\/tech.yahoo.com\/ai\/\" data-ylk=\"slk:Artificial intelligence;elm:context_link;itc:0;sec:content-canvas\" data-yga=\"{&quot;yLinkElement&quot;:&quot;context_link&quot;,&quot;yModuleName&quot;:&quot;content-canvas&quot;,&quot;yLinkText&quot;:&quot;Artificial intelligence&quot;}\" class=\"link \" rel=\"nofollow noopener\" target=\"_blank\">Artificial intelligence<\/a> is also reshaping \u2060the broader semiconductor sector, increasing requirements for testing, packaging, and high-speed interconnects, as chips become more complex and performance-intensive.<\/p>\n<p class=\"yf-1fy9kyt\">&#8220;AI has significantly increased computing power requirements, and that in turn \u2060has raised the requirements for semiconductor testing,&#8221; said Terry Feng, China sales director at U.S. chip testing firm Teradyne.<\/p>\n<p class=\"yf-1fy9kyt\">The impact is particularly visible in areas such as optical interconnects &#8211; a critical layer linking chips inside data centres &#8211; for which China \u200bis \u200ba major global supplier.<\/p>\n<p class=\"yf-1fy9kyt\">&#8220;Our order backlog is already booked out \u200binto next year,&#8221; said Zhou Limin of Mycronic&#8217;s \u200cMRSI unit, which makes high-precision equipment used to assemble optical modules, a key component of optical interconnects.<\/p>\n<p class=\"yf-1fy9kyt\">The AI boom has also started to strain the semiconductor supply chain globally, particularly in raw materials and high-end components, as manufacturers struggle to keep up with rising demand.<\/p>\n<p class=\"yf-1fy9kyt\">Given the size and strength of its manufacturing industry, China is better placed than most to respond, according to executives and industry analysts.<\/p>\n<p class=\"yf-1fy9kyt\">&#8220;We are very optimistic about the memory (chip) cycle &#8211; \u200cthere will be large-scale capacity expansion,&#8221; said Bai Yu, vice president \u200bat Suzhou Origins Materials Technology, which will begin construction of a \u200bnew production base next month.<\/p>\n<p class=\"yf-1fy9kyt\">The company supplies \u200bmaterials used in manufacturing to top Chinese chipmakers including ChangXin Memory Technologies, Yangtze Memory Technologies \u200cand Semiconductor Manufacturing International Corporation.<\/p>\n<p class=\"yf-1fy9kyt\">FOREIGN SUPPLIERS STILL KEY \u200bPART OF CHIP SUPPLY CHAIN<\/p>\n","protected":false},"excerpt":{"rendered":"By Eduardo Baptista March 25 (Reuters) &#8211; China&#8217;s chip industry is showing strong growth momentum as a global&hellip;\n","protected":false},"author":2,"featured_media":357448,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[20],"tags":[345,343,344,173202,173201,1657,18815,85,46,22389,125],"class_list":["post-357447","post","type-post","status-publish","format-standard","has-post-thumbnail","category-artificial-intelligence","tag-ai","tag-artificial-intelligence","tag-artificialintelligence","tag-cameron-johnson","tag-capacity-expansion","tag-china","tag-chip","tag-il","tag-israel","tag-manufacturers","tag-technology"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts\/357447","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/comments?post=357447"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts\/357447\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/media\/357448"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/media?parent=357447"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/categories?post=357447"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/tags?post=357447"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}