Interpretation of the Government Work Report: The future code of the electronic components industry

1. Industrial upgrading and technological research: breaking bottlenecks and strengthening high-end substitution

• High-end chip localization speeds up: Focusing on weak links such as CPU/GPU, analog chips, power semiconductors, EDA/IP, and high-end equipment materials, and adding 344 billion yuan of capital support from the third phase of the large fund, we will promote the implementation of the goal of 50%+ localization rate of advanced processes and key equipment for 7nm and below, and release massive domestic substitution space for 5G, AI, Internet of Things, industrial control and other fields.
• Rebuilding the industrial base: Strengthen the research on the underlying technology of electronic components, support the upgrade of basic components such as high-end capacitors, resistors, connectors, sensors, and optical devices, get rid of the homogeneity of the mid- to low-end, and advance towards high precision, high reliability, low power consumption, and miniaturization to meet the needs of intelligent and high-end terminals.
• Technology ecological synergy: Promote the in-depth integration of industry, academia and research, and gradually cultivate specialized, new and unicorn enterprises.China Government Network, encourage collaborative verification of domestic components and complete terminals, accelerate the transition from usable to easy to use, and open up the entire chain from design to manufacturing to packaging and testing to application.

2. Supply chain resilience: independent and controllable + domestic substitution to build a secure foundation

• Comprehensive deepening of domestic substitution: Policies guide key areas to give priority to domestic solutions. Core scenarios such as automotive electronics, industrial control, medical equipment, and communication equipment are accelerated to be beautified. Superimposed rules of origin are tilted towards the wafer manufacturing link, forcing high value-added links to be localized and reducing import dependence.
• Replenishing and strengthening the industrial chain: Focus on upstream shortcomings in equipment, materials, components, etc., and support electronic chemicals36 krypton, special gases, photoresists, targets and other key materials, improve the equipment-material-manufacturing collaborative ecology, reduce the risk of supply interruption, and improve the level of independent control of the supply chain.
• Pay equal attention to stability and security: Promote the diversified supply of key components, encourage local companies to expand production and technology iteration, while supporting overseas high-quality resource cooperation, building a supply chain system that is independent-focused and diversified to cope with international technology blockades and trade frictions.

3. Artificial Intelligence + Integration: Scenario explosion drives demand for components to escalate

• Demand for smart terminals explodes: Intelligent connected cars, AI mobile phones/computers, intelligent robots, industrial robots and other terminals are increasing in volumeChina Government Network, driving a surge in demand for high-performance MCUs, sensors, power devices, memory chips, and AI acceleration chips, especially components with high computing power, low power consumption, and small size.
• Industrial and end-side AI penetration: The accelerated implementation of the industrial Internet, smart manufacturing, smart sensors, and edge computing is driving the growth in demand for industrial-grade chips, high-precision sensing, radio frequency devices, and optical modules, forcing components to be upgraded to high reliability, wide temperature range, and long life.
• Expansion of new technology scenarios: 6G, quantum technology, embodied intelligence, low-altitude economy and other future industrial layoutsChina Government Network, drive technological research and mass production of cutting-edge components such as new communication chips, millimeter wave devices, optical communication components, and power semiconductors, and cultivate new growth poles.

4. Regional collaboration and clustering: optimize layout and enhance global competitiveness

• Strengthening the core cluster: Existing clusters such as the Yangtze River Delta, Pearl River Delta, and Beijing-Tianjin-Hebei focus on high-end chips, advanced packaging, equipment materials, and new components, integrate innovative resources, conquer common technologies, form a leading + supporting collaborative ecosystem, and enhance global voice.
• Regional differentiated layout: The central and western regions undertake mid- to low-end manufacturing and packaging and testing production capacity, while the eastern region focuses on R&D and design, high-end manufacturing, and headquarters economy, forming a gradient division of labor between R&D in the east and manufacturing in the west to reduce costs and improve efficiency.
• Cluster policy empowerment: Newly cultivate national advanced manufacturing clustersChina Government Network, preferential in terms of land, taxation, talent, financing, etc., to support enterprises in the cluster to jointly tackle key problems, share resources, and collaborate to go overseas, so as to create a number of globally competitive electronic component industry highlands.

5. Future Trends: Three Main Lines to Grasp the Code of Industrial Growth

1. High-end and autonomy become the core lines: Driven by both policies and funds, domestic substitution of high-end chips and core components has entered an accelerated period. The share of local companies continues to increase, gradually breaking overseas monopolies.
2. AI and emerging scenarios become growth engines: Artificial intelligence + has penetrated thousands of industries. Smart terminals, industrial Internet, new energy, 6G and other fields have driven the demand for components and prices to rise, and technology iteration has accelerated.
3. Clustering and ecology become the key to competition: Regional collaboration and full-chain integration have become mainstream, enterprises have shifted from working alone to ecological collaboration, and the equipment-material-manufacturing-application closed loop has been improved to enhance overall competitiveness.

Summary