Semiconductor Manufacturing International Corporation or SMIC, the leading Chinese chipmaker, has succeeded in developing 40 nanometer production technology. The achievement allows SMIC to install circuits measuring 1/4,000 the width of a human hair onto a board and narrows the technology gap between SMIC and industry leaders Intel and Samsung Electronics to less than a year.
SMIC has never posted a profit since its establishment in 2000, but the Chinese government has poured billions of dollars into the company each year.
An analysis by the Chosun Ilbo and Samsung Economic Research Institute of the industrial competitiveness of Korea, China and Japan found that the Chinese government has been rapidly boosting the competitiveness of its semiconductor industry through aggressive investment, tax cuts and programs to train experts.
Japan used to rule supreme in the global memory chip market but had to relinquish its top position to Korea. But it still beats Korea in non-memory chips. Japanese companies like Renesas Electronics, Toshiba and Panasonic all rank among the world's top 10 and account for 22 percent of the global non-memory chip market, where Korean companies account for only 2.3 percent.
While Korean companies were focusing their investments on memory chips, Japanese and Chinese companies were bolstering their competitiveness and market share in the non-memory market, which is four times larger.