Resources have been wasted as companies “with insufficient knowledge of integrated circuit development have blindly entered into projects”, said Meng Wei (pictured) of  China’s National Development and Reform Commission, yesterday.

“We have also noticed that the enthusiasm for domestic investment in the integrated circuit industry is constantly rising,” said Meng, “some companies with no experience, technology, and talents have joined the integrated circuit industry. Insufficient understanding of the laws of IC development and low-level repeated construction of chip projects are surfacing, with some projects stagnated and factory buildings vacant, resulting in waste of resources.”

In just over a year, six large semiconductor projects have folded.

In July, Dekema (Nanjing) Semiconductor Technology Co filed for bankruptcy after investing $3 billion.

Wuhan Hongxin Semiconductor Manufacturing Co is on the verge of bankruptcy after spending $19 billion with its one and only litho tool in hock to the bank.

GF (Chengdu) Integrated Circuit Manufacturing Co was to be a $9.3 billion jv between between Globalfoundries and the city of Chengdu but it is now suspended. 

Dehuai Semiconductor Co planned to invest $6. But the compsny is now said to be ‘nesr-defunct’ with back salary payments owing to employees.

Guizhou Huaxintong Semiconductor Technology Co was a jv with Qualcomm but has been closed

Fujian Jin Hua was a DRAM venture which ceased fab construction when the US refused to send it manufacturing equipment.

Meng said that the NDRC would “work with relevant departments to strengthen top-level design, pay close attention to industrial planning and layout, and strive to maintain order in industrial development in response to the current chaos in the industry”.

The China government can be blamed for some of the problems by offering large grants to semiconductor companies.

According to the Chinese data source, Qichaca, 13,000 companies have registered as new semiconductor companies this year in the wake of an expected $1.4 trillion government injection into the chip sector.

Companies with zero involvement in ICs, or even in electronics, have proclaimed themselves to be semiconductor companies in order to get a share of the government’s $1.4 trillion programme to be announced, at the end of this year, in China’s 14th Five Year Plan.

Two companies which have registered as semiconductor companies this year are  Shanghai Xinpeng Industry Co, an auto parts maker, and Dalian Morningstar Network Technology Co, a seafood supplier and online gaming company.