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[News] European Chip Giants Doubling Down on “Made in China”: Key Investments from STM, NXP and More
According to a report from Anue, in recent years, geopolitical tensions have increased market uncertainty, prompting many semiconductor companies to seek more resilient supply chains. Interestingly, “Made in China” has emerged as a strategy for tapping into the Chinese market, with several European and American semiconductor giants ramping up their investments there.
The report points out that one of the key reasons is the immense appeal of China’s new energy vehicle (NEV) market. As the largest NEV market in the world, China is becoming increasingly significant to major European chip manufacturers like Infineon, STMicroelectronics, and NXP, especially as Western electric vehicle markets experience a slowdown.
Shift Toward Localized Chip Production in China
Citing Fabio Gualandris, president of manufacturing at STMicroelectronics, the report highlights that producing chips outside of China risks missing out on the country’s rapid electric vehicle development.
Manufacturing and R&D in China allow for quicker responses to customer demands while reducing costs. In line with this, Infineon has decided to adjust its production strategy by transferring some manufacturing processes to Chinese foundries in response to the urgent demand from Chinese clients for localized production of key components, the report notes.
Additionally, the report highlights that Infineon has operated a production base in Wuxi, China, since 1996; however, this facility is primarily dedicated to backend assembly and packaging. As Infineon does not currently have its own wafer manufacturing facility in China, the report suggests that some frontend chip manufacturing might be outsourced to Chinese foundries.
Strengthening Partnerships with Chinese Companies
At the same time, the report emphasizes that international semiconductor giants are actively partnering with local Chinese semiconductor firms. For instance, on November 21, STMicroelectronics announced that it had established a partnership with Hua Hong Semiconductor, China’s second-largest foundry, to jointly manufacture 40nm microcontroller units (MCUs). The report notes that the plan is to commence producing 40nm MCUs in China by the end of 2025.
Last year, STMicroelectronics announced a joint venture with Sanan Optoelectronics in China, as indicated by the report. This partnership is dedicated to developing, manufacturing, and selling high-performance silicon carbide (SiC) power devices and diodes, with a total project investment of approximately USD 3.2 billion.
Meanwhile, according to the report, NXP has also announced plans to expand its production capacity in China, with the goal of establishing a complete Chinese supply chain. As NXP already operates a packaging and testing facility in Tianjin, the report speculates that the company may also transfer some frontend chip manufacturing to China. Additionally, the report notes that NXP has launched its first fully online laboratory in China—the AIoT Innovation Center—demonstrating its strong commitment to the Chinese market.
According to the report from Anue, the investment initiatives by European and American semiconductor giants in China include:
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(Photo credit: STMicroelectronics)
Please note that this article cites information from Anue.
