Chinese car vendors have asked chip suppliers, including foreign ones, to place wafer starts for their demand with China-based foundries as China accelerates its push for IC self-sufficiency, according to industry sources.

Foreign foundries with fab operations in China are also being required by their Chinese automotive customers to allocate more of their fab capacities in China for automotive chips, the sources said. The car vendors have to cater to the government's semiconductor self-sufficiency policy while anticipating their demand for ICs will boom, the sources indicated.

According to sources at Taiwan-based IC design houses engaged in the supply chain of China's auto companies, fabless chipmakers are being asked to place orders with local foundries in China. Automotive ICs are built mainly using mature process technologies, which are available at China-based foundries.

For China-based foundries, gaining more orders shifted for automotive ICs may help them better compete with international IDMs, such as Infineon, NXP, Onsemi, Renesas, STMicroelectronics and TI, according to market observers. Nevertheless, the observers said, it is far from being enough to break these IDMs' dominance in the automotive IC sector.

The self-sufficiency rate of China's automotive chips is about 5%, whereas Europe-, Japan- and US-based IDMs collectively hold an around 80% share of the global automotive IC market, the observers said.

On another front, Korea-based IC design houses reportedly have been required by US clients to not use China-made ICs, and have had to withdraw orders from their China-based foundry partners, such as SMIC. US export restrictions are the main factor behind the moves, according to Korea-based media reports.

By DIGITIMES