Shenzhen doubles down on chip substitution
What happened: On February 12, the city of Shenzhen rolled out an “AI Plus” action plan for advanced manufacturing, aimed at accelerating AI adoption in the sector.
What caught our eye: The plan explicitly calls for “domestic substitution” in auto chips:
- “[We should] target the trillion-level market of new energy vehicles, and support domestic substitution of automotive-grade advanced intelligent driving AI chips at 14nm and below, intelligent cockpit SoC chips, domain controller MCUs, and central domain control SoC/MPU chips.”
ICYDK: Policymakers usually prefer softer phrasing like “self-sufficiency” when signaling efforts to replace foreign tech. Using “domestic substitution” in official policy documents is rare.
Our take: The fact that policymakers aren’t even bothering to sugarcoat the push for domestic substitution suggests the effort is about to intensify, especially in semiconductors.
What to watch: The 15th Five-Year Plan (FYP) is set to be released in early March.
- In October, the Party’s FYP proposals called for “extraordinary measures” to advance self-sufficiency in several sectors.
- Get ready for more plain talk – and likely, more forceful policy tools to match.
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