Important semiconductor project in Wuhan failed3. March 2021
Important semiconductor project in Wuhan failed
A $20 billion Chinese government-backed semiconductor manufacturing project has faltered after main operator Wuhan Hongxin Semiconductor Manufacturing Co. (HSMC) announced Friday (Feb. 26) its decision to lay off all 240 employees.
According to Chinese media reports, employees of the company, once touted as part of Beijing’s plan to become a self-sufficient chipmaker, were given notice via WeChat message by Monday. The company made clear it had “no plan to resume production,” which has been halted since late 2019 because it failed to attract more investors.
HSMC was founded in November 2017 with a planned investment of $20 billion and a leadership team of former Taiwan Semiconductor Manufacturing Company (TSMC) executives, including Chiang Shang-yi (蔣尚義), former CEO of TSMC, as CEO. It was expected to be able to directly or indirectly create 50,000 jobs and generate $9.25 billion in annual production at full capacity.
In 2019, the project stalled due to insurmountable funding gaps, and the status of public money sunk into it was left unaddressed. Meanwhile, Chang left the company in mid-2020, describing his experience with HSMC as a “nightmare.”
After Chang’s resignation, reports emerged calling HSMC a “billion-dollar chip manufacturing scam.” Builders and contractors complained about late payments, while some reports indicated that most of their employees, as claimed, had no background in semiconductor manufacturing.