Wuhan Hongxin Semiconductor Manufacturing, or HSMC, China’s $ 18.5 billion chipmaker just lost its chief executive at a time when cash shortages were putting the company on the brink of breaking. real.
Chiang Shang-yi, a semiconductor veteran who has been the CEO and general manager of HSMC since June 2019, resigned from all of the company’s positions in Wuhan this past July. Sources from Fortune magazine said that Mr Chiang had left China.
The attorney’s statement said that this director resigned for personal reasons and was accepted by the company. Mr. Chiang said his days at HSMC were “an unpleasant experience” and “difficult to describe in just a few words.”
Mr. Chiang Shang-yi, who just resigned from HSMC after only 1 year in leading this project
Formerly a director in TSMC, the world’s largest chip processor, Mr. Chiang is famous for his experience and expertise in chip manufacturing. Studied at Princeton and Stanford Universities and has nearly 40 years of experience in the field. In 2016, he was appointed an independent director of SMIC, China’s largest chip processing company. By 2019, he turned to HSMC, an ambitious chip project backed by the Wuhan government.
Founded in 2017, with an investment plan of about $ 18.5 billion, HSMC plans to produce logic chips using 14nm and 7nm process technology and less. HSMC is part of the recent investment boom in the semiconductor industry in China, as the country is prioritizing a policy of autonomy in core technologies.
Prior to that, the project in Wuhan had received strong support from the local government. The Hubei government website states that this is one of the province’s biggest investment projects in 2017 and 2018 and a “key construction project of the province”.
But this project has never progressed as expected and faced a series of difficulties from last year until now. In November 2019, a local court suspended HSMC’s land use rights to the planned plant site due to a dispute with one of the companies involved in the land.
In July this year, a report from the government also showed that HSMC was facing a severe capital shortage that could cause the company to stop operations at any time. According to the report, nearly 90% of the 18.5 billion USD capital in the original investment plan has not been received.
Fundamentally this project had to be halted, according to the report, when the likelihood of getting any of the remaining funding became uncertain.
The investigation report of Caixib also showed that the technological capacity of the plant was overstated. The local government said that HSMC owns a chip photo-engraving machine made by Dutch company ASML and is the most modern machine ever imported into China today. Turns out this information is just a misunderstanding when the HSMC’s device is only similar to one of the 7nm chip manufacturing machines ever imported by China.
After many promises, up to now the chip factory project of HSMC is still a model on paper
Currently, the business registration shows that HSMC is now under the control of the Wuhan provincial government after registering to change the shareholder list on November 10. This enterprise is now completely under the control of the State Asset Management and Supervision Committee in the Dongxihu District of Wuhan.
HSMC is one of many examples showing the carelessness of local governments to invest in chip manufacturing. According to Meng Wei, a spokesman for the National Development and Reform Commission of China, many companies have “blindly engaged in projects” without the experience, technology and qualified manpower. integrated circuit development.
According to Caixin’s calculations, by the end of 2019, there are about 50 large-scale chip manufacturers across China with total capital raised about 1.7 trillion yuan (more than 258 billion USD) for the sector this.
Refer to Niikei