One of China’s flagship 7nm foundries falls in a hole as funding flees

One of China’s flagship efforts to accelerate its semiconductor industry is floundering in the wake of the COVID-19 pandemic.

The Wuhan Hongxin Project, an effort to create a Chinese-owned 7nm foundry in the city that became the epicentre of the COVID-19 pandemic, started in 2017. But some of the project’s backers have earned rebukes from regulators and local authorities revoked the project’s access to land after a dispute with contractors. The project may also have failed to secure all necessary permits.

Now Chinese media report that the local government hosting the project, the Dongxihu District Government of Wuhan, published and then took down an assessment of the project that found it has not received around 90 percent of its promised $20bn funding.

The Jiqizhixin report says that while much chip-making equipment for the facility’s planned 7nm and 14nm lines is in place, the continued funding needed to complete the factory and start operations is in jeopardy.

The COVID-19 pandemic didn’t help matters, as it made working on-site difficult. But the main difficulty seems to be finding cash to fund the work needed to turn the facility into a functioning factory.

Local reports say that the facility is therefore more likely than not to blow deadlines set under China’s semiconductor industry plan and could founder entirely.

Which isn’t a good look given China has just introduced new policies to accelerate semiconductor manufacturing even as its local industry missed a previous set of targets and president Xi Jinping this week urged the nation to do better as an economic and strategic imperative.

The likes of Huawei, meanwhile, are figuring out how to cope with even tighter trade restrictions that make it harder for them to use technology with any ties to the USA. ®