China's semiconductor industry is facing challenges as smaller companies go bankrupt and others withdraw their IPO applications. Since last year, 23 semiconductor companies have withdrawn their IPO applications, indicating a slowdown in the industry. Additionally, over 10,000 Chinese chip-related companies closed in 2021-2022, and a record-breaking 10,900 semiconductor-related companies deregistered in 2023. This trend highlights the financial troubles and difficulties faced by many companies in the sector [c04d5268].
One recent example is the bankruptcy of Shanghai Wusheng Semiconductor, a maker of OLED display drivers, microcontrollers, and CMOS image sensors. The bankruptcy of Shanghai Wusheng Semiconductor is connected to the financial troubles of Wu Sheng Electronics Technology Group and Nanjing Wusheng Semiconductor Technology. These bankruptcies reflect the challenges faced by companies in the Chinese semiconductor industry [c04d5268].
China's semiconductor industry experienced rapid growth since 2014, with a significant increase in the number of semiconductor companies and parks. However, several high-profile projects in the industry have failed, leading to caution among investors. The tightening of IPO policies in 2024 is expected to make it more difficult for underqualified semiconductor companies to raise capital. Despite these challenges, the Chinese government continues to invest in the semiconductor sector, recently injecting $47.5 billion into its Big Fund III [c04d5268].