China needs to develop its auto chip sector, official says

Local Chinese companies are urged to develop automotive chips and cut reliance on imports as semiconductor shortages hit the auto industry across the globe.

Miao Wei, former minister of industry and information technology, said a lesson from the global chip shortages is that China needs its own independent and controllable auto chip industry.

Miao, now a senior official at the National People Consultative Conference, made the remarks at the China Auto Show held in Shanghai from June 17 to 19.

Efforts should be made in fundamental research and prospective studies to chart a roadmap for the sector's development, he said.

"We are in an age where software defines cars, and cars need CPUs and operating systems. So we should plan in advance," said Miao.

Chip shortages are cutting global vehicle production. Last month, vehicle sales in China dipped 3 percent, primarily because carmakers failed to acquire enough chips.

Electric car startup Nio delivered 6,711 vehicles in May, up 95.3 percent from the same month last year.

The carmaker said its deliveries would have been higher if not for the chip shortages and logistical adjustments.

Chipmakers and auto suppliers are already working around the clock to solve the problem, while authorities are improving coordination among companies in the industrial chain for better efficiency.

Dong Xiaoping, an official at the Ministry of Industry and Information Technology, said the ministry has asked local automobile makers and semiconductor companies to compile a brochure to better match their supply and demand of auto chips.

The ministry is also encouraging insurance companies to roll out insurance services that can boost local automakers' confidence in using indigenously-produced chips, so as to help ease chip shortages.