A Sustainable Production Segment of Global Value Chain View on Semiconductors in China: Temporal and Spatial Evolution and Investment Network
Authors: Liu Qing , Xue Desheng , Li Wei 
Published: October 2024

The semiconductor industry is a pivotal hub in the global information sector, in which superpowers compete for technological dominance. As a strategic, leading, and foundational sector, it is vital for advancing China’s manufacturing ambitions through new waves of transformation and upgrades. Therefore, of particular concern is the crisis surrounding China’s semiconductor supply chain insecurity and the intensifying U.S. sanctions on China’s high-tech companies. As such, in this study, we utilize data from China’s semiconductor enterprises, investments, and related statistics from 2002 to 2020; industrial agglomeration indicators; and a social network analysis to examine the spatiotemporal pattern, industrial agglomeration, and investment networks of six key value chain segments: wafer materials, packaging materials, semiconductor equipment, integrated circuit (IC) design, manufacturing, and testing/packaging. The research focuses on how these sectors can contribute to sustainable growth and economic responsibility within China’s semiconductor industry. Accordingly, the core questions explored were as follows: what are the provincial-level spatial production dynamics and evolutionary characteristics within China’s semiconductor industry, and how do the inter-provincial investment patterns manifest? The findings reveal the following: (1) The findings reveal a strong concentration of firms in the Eastern Coastal region, particularly in Jiangsu, Shanghai, Zhejiang, and Guangdong. Additionally, IC design exhibits the highest clustering, and other segments such as wafer materials, manufacturing, and packaging/testing are relatively concentrated, whereas equipment distribution is more dispersed. (2) The industry expanded steadily from 2002 to 2013, with a rapid expansion from 2014 to 2020, particularly in Guangdong. (3) Investment patterns are characterized by local and regional focus, strongly influenced by geographical proximity. This study aims to reveal the geographic concentration patterns of China’s semiconductor industry and to explore its investment networks. The findings are intended to provide theoretical support for optimizing sustainable industrial layouts, promoting sustainable industrial practices, and guiding policy formulation. Furthermore, in the broader context of de-globalization, this study offers insights and recommendations for strengthening industrial autonomy and sustainability in response to external challenges, thereby contributing to the sustainable development of a more robust domestic semiconductor supply chain. These insights are particularly significant in safeguarding China’s technological independence and future economic stability amid global tensions. Furthermore, by integrating sustainability into its semiconductor industry, China can create a more resilient, self-sufficient, and environmentally responsible industrial sector, capable of meeting both domestic and global demands. As China continues to expand its semiconductor industry, incorporating sustainable development principles will be essential for long-term success. The sustainable practices not only ensures compliance with environmental regulations but also enhances industrial competitiveness, promotes green techniques and contributes to broader societal goals. This aligns with China’s broader ambitions for sustainable development and positions the country as a key player in the global green technology revolution.