China's SMIC, chip sector boost R&D spending despite weak earnings

Beijing is planning to create a $40.9 billion fund to strengthen China's semiconductor supply chain. Despite declining earnings, Chinese semiconductor manufacturers are increasing their investment in research and development. In the first half of the year, over 70% of listed Chinese semiconductor companies experienced a decrease in earnings, but nearly 80% still chose to invest more.

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Frequently Asked Questions:

1. Despite weak earnings, why is China's SMIC increasing its R&D spending?

Chinese semiconductor manufacturers, including SMIC, are increasing their R&D spending despite weak earnings because Beijing is looking to establish a stronger presence in the chip sector. This investment is part of China's strategy to reduce its reliance on foreign semiconductor technology and develop its domestic semiconductor industry.

2. How much did SMIC's R&D spending increase?

SMIC's R&D spending rose by 6% in the second quarter, reaching $178 million compared to the previous quarter's $168 million.

3. What is the reason behind China's increased investment in the chip sector?

China aims to reduce its dependence on foreign chip technology and establish its presence in the semiconductor industry. Increasing R&D spending is part of China's strategy to develop domestic capabilities and boost self-sufficiency in chip manufacturing.

4. Are there any impacts of China's chip ban on Applied Materials' revenue?

Applied Materials expects a revenue hit of $2.5 billion due to the chip ban imposed by China. This ban has affected several semiconductor companies as they face restrictions and challenges in accessing the Chinese market.

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China's SMIC, chip sector boost R&D spending despite weak earnings - Nikkei Asia