Secret Order from Chinese Government: "Chinese Car Manufacturers Must Use Chinese Semiconductors"

BYD, Geely and Others Receive Unofficial Requests

[Image source= Xinhua News Agency]

The Chinese government has been secretly urging domestic electric vehicle companies to use more China-made semiconductors, according to claims.

On the 15th, Bloomberg reported that an anonymous source said, "The Ministry of Industry and Information Technology of China requested electric vehicle companies such as BYD and Geely to refrain from using foreign semiconductors as much as possible."

The Ministry of Industry and Information Technology had unofficially set a goal for domestic automakers to source 20% of the semiconductors they use from China by 2025. However, it is reported that dissatisfaction arose recently due to slow progress.

To comply with this request, overseas semiconductor manufacturers would have to allocate their production volumes to Chinese foundries such as SMIC or Hua Hong Semiconductor.

This is interpreted as a self-help measure to boost the domestic semiconductor industry after the United States imposed various sanctions and sales restrictions that hinder the development of China's semiconductor sector.

As a result of this measure, uncertainty is expected to increase regarding the business plans of foreign companies such as Nvidia, NXP Semiconductors, Renesas Electronics, and Texas Instruments.