Electronic components sector to gain traction

China's top industry regulator said on Friday that it will ramp up efforts to boost the development of the electronic components sector, which is the cornerstone of the entire information technology industry and key to ensuring the stability of production and supply chains.

The Ministry of Industry and Information Technology said in a three-year plan published on its website that China aims to grow the sales of electronic components sector to 2.1 trillion yuan ($325.1 billion) by 2023.

The ministry did not disclose the current sales volume of the electronic components industry. Instead, it said that more efforts will be made to cultivate a batch of internationally competitive local electronic components companies, with at least 15 of them having a revenue of over 10 billion yuan each by 2023.

The move is designed to accelerate the high-quality development of the electronic component industry, and the plan should focus on achieving breakthroughs in crucial basic electronic components for key markets such as smart terminals, 5G, industrial internet, data centers and new energy vehicles, the ministry said.

China will encourage innovation in crucial components such as radio frequency filters, high-speed connectors, sensors and optical communication devices, the ministry said.

Wang Peng, deputy head of the China Center for Information Industry Development, a Beijing-based think tank, said China's information technology industry has made strides in the past decades, with local system integration companies and original equipment makers emerging on the international stage as competitive players.

But when it comes to basic electronic components, there are many bottlenecks, including overreliance on foreign suppliers, Wang said.

For instance, many Chinese robot makers rely on foreign companies for high-end speed reducers, servomotors and control panels, three basic building blocks of sophisticated automated machines.

Local players are working hard to solve the problems. Shaanxi Qinchuan Machinery Development Co Ltd, for instance, is producing cycloidal pinwheel speed reducers at scale. Cycloidal speed reducers allow robots to move with greater accuracy.

Currently, there is also a shortage of semiconductors necessary for making the electronic components of automobiles, which is impacting vehicle production in China to some extent.

Huang Jipo, chairman of Chinese chipmaker Sine Microelectronics, said carmakers have stringent standards for the reliability and stability of automobile chips, which makes them prefer established foreign chip giants over emerging Chinese companies.

"But as Chinese companies beef up research and development capabilities, they have the potential to enter the mainstream supply chain of automakers," Huang said.