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China vital growth market despite US-China semiconductor tensions

China remains an important growth market for French-Italian semiconductor STMicroelectronics, despite increasing U.S-China tensions over semiconductors, the company’s chief executive said on Tuesday.

Speaking at a Citi technology conference in London, CEO Jean-Marc Chery said the company is not daunted by plans by Chinese chipmakers to invest in relatively older generations of chips, following a US-led campaign to prevent Chinese companies from being able to make their own advanced chips.

He said the company views it as essential to be in the Chinese market for electric vehicles, digital power controls and renewable energy.

STM is a major maker of automotive chips and microcontrollers, competing with companies who make chips at less advanced manufacturing nodes (sizes) such as Texas Instruments, NXP ON Semiconductor and Renesas.

Industry group SEMI forecasts chipmakers in mainland China will add around 12% to their capacity this year, more than any other country, helped by substantial government subsidies.

For us it is a risk for sure to have seen this massive investment of mainstream technology by Chinese chipmakers, Chery said. “But it’s also an opportunity.”

But he said the company’s strategy of investing in local production, including its joint venture with Sanan Optoelectronics to produce silicon carbide based chips, will ensure the company’s growth.

“China is today 15% of our revenue. We know that in some markets like silicon carbide, China will be the fastest growth market. So our China penetration will increase,” he said. Reuters

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