Chinese manufacturing hub Suzhou pushes expansion of local semiconductor sector in 2023 as US escalates chip tech restrictions

Suzhou, home to more than 300 firms that are part of China’s chip supply chain, expects revenue from this sector to reach US$17.28 billion in 2023

City is also looking to initiate two to three new ‘core technology research projects’ and add three listed firms to its local semiconductor ecosystem

Reading Time:3 minutes

A bird’s-eye view of the central business district of Suzhou, a city in eastern Jiangsu province that serves as a major Chinese manufacturing hub. Photo: Shutterstock

Ann Caoin Shanghai

Published: 8:30pm, 1 Mar 2023

Chinese manufacturing hub Suzhou, the most populous city in eastern Jiangsu province, is targeting a 20 per cent increase in the output of its semiconductor industry, as it joins other local governments in doubling down on the country’s tech self-sufficiency drive amid Washington’s efforts to expand chip production in the United States.

The municipal government of Suzhou, home to more than 300 companies that are part of China’s semiconductor supply chain as of 2022, expects revenue from this sector to reach 120 billion yuan (US$17.28 billion) in 2023, up from 100 billion yuan last year.

Apart from that target, which was first reported last week by local media Suzhou Broadcasting System based on an official announcement at a recent local conference, city authorities are also looking to initiate two to three new “core technology research projects”, foster the development of 10 “leading innovative companies” and add three more listed firms to its local semiconductor ecosystem this year.

With well-established development zones, an extensive transport network and relative proximity to Shanghai, Suzhou is one of the country’s foremost destinations for foreign investment. Hi-tech manufacturing enterprises in the city include Samsung Electronics Suzhou Semiconductor Co, domestic chip foundry Hejian Technology Corp, and a semiconductor assembly and test joint venture between US-based Advanced Micro Devices and Nantong Fujitsu Microelectronics.

Suzhou, the most populous city in eastern Jiangsu province, is home to more than 300 companies that are part of China’s semiconductor supply chain. Photo: Shutterstock

Suzhou’s latest initiative reflects a broader trend among local governments across China to pursue programmes that support the country’s drive for technology self-reliance, countering the US government’s strategy of tech containment.

The provincial government of Jiangsu in January unveiled a policy package for the semiconductor industry that includes at least 500 million yuan annually in financial support over the next three years. These include subsidies and cash awards covering research, equipment purchase, chip design, packaging and production.