US-China tech war: Shenzhen to establish international sourcing platform for semiconductors as global chip shortage persists

The Shenzhen sourcing strategy will enable partner firms to band together and gain greater leverage in negotiating for equipment, components and raw materials

Under that plan, Shenzhen will also serve as a major location for procurement, software development, branding, training and other related services

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Various companies involved in the semiconductor and electronics industries around the world, including manufacturers and distributors, will be engaged by Shenzhen as partners in the new global sourcing platform. Photo: Shutterstock

Published: 7:00pm, 26 Jan 2022Updated: 2:12pm, 27 Jan 2022

China will develop an international sourcing platform for semiconductors and other electronic components in Shenzhen – known as the country’s Silicon Valley and the richest city in southern Guangdong province – in a bid to advance the nation’s hi-tech self-sufficiency drive amid a race between Beijing and Washington to overcome the global chip shortage.

The goal is to engage various companies involved in the semiconductor and electronics industries around the world, including manufacturers and distributors, as partners in the envisioned global platform in Shenzhen, according to the strategy announced on Wednesday by state economic planner the National Development and Reform Commission (NDRC) and the Ministry of Commerce.

China will support electronics and chip companies to set up shop on the platform, enabling these firms to “encourage domestic and overseas clients to purchase electronics components and various types of chips” through that same resource, according to the government’s plan.

“By choosing Shenzhen, [we aim] to establish replicable and scalable innovations around relaxed market access restrictions … to explore a more flexible and scientific policy and system of management to build a better socialist market economy,” said Zhao Chenxin, secretary general of the NDRC, in a press conference on Wednesday.

Shenzhen, the richest city in southern Guangdong province, is widely recognised as China’s Silicon Valley. Photo: Shutterstock

The southern metropolis, which President Xi Jinping hand-picked to become a world-class innovation powerhouse and model for economic reform, will also serve as a major location for procurement, software development, branding and training, among a range of services, according to the plan.

With key online and physical infrastructure in place, the government expects companies operating in Shenzhen to band together and gain greater leverage in negotiating for equipment, components and raw materials.