A chipmaking industry is emerging as a new driver of the high-tech manufacturing in China's southernmost province of Hainan.

More than 40 semiconductor companies have now established operations in Hainan, with several already well into production. The island province is developing a distinctive and dynamic semiconductor ecosystem while leveraging the Hainan Free Trade Port to connect Chinese companies with overseas markets.

Why chipmakers choose Hainan

For semiconductor companies expanding their global operations, Hainan's free trade port policies and strategic location are proving to be increasingly attractive.

Tax incentives, zero-tariff policies for certain imported equipment, more convenient cross-border capital flows and bonded repair services are all helping companies to improve their operating efficiency while reaching global consumers.

The experience of AMEC Haixin (Hainan) Technology Co Ltd is one example. The company officially began operations in Haikou's Qiongshan district in July, just two months after it began considering the move.

 Company officials said Hainan's tax incentives and cross-border financial services were particularly attractive for business operations, staff recruitment and overseas expansion.

Established semiconductor companies are also strengthening their presence. Hygon Information Technology Co Ltd has established an ecosystem joint laboratory in Hainan and is participating in the development of a local AI industry innovation center. A dozen companies have already signed up with the center, giving rise to a linked ecosystem from technology development to product adaptation and commercial applications.

Tsinghua Unigroup Co Ltd is developing an industrial cluster in Haikou that covers chip design, advanced manufacturing and the digital economy. Its new industrial park is also attracting partners in areas such as semiconductor equipment, with the aim of serving Southeast Asian and global markets.

VeriSilicon Microelectronics Co Ltd, one of China's leading semiconductor IP companies, established a research and development center in Haikou in 2019 and has continued to develop chip solutions for sectors including smart healthcare and elderly care. Its Haikou presence has become part of a broader global R&D and business network.

From Hainan to overseas markets

Hainan's semiconductor companies are not only expanding their production — they're also using the free trade port to reach overseas markets.

Workers conduct product tests at Ruichips Microelectronics in Haikou. [Photo/VCG]

At the Haikou Integrated Free Trade Zone, Ruichips Microelectronics Co Ltd produces semiconductor packaging products for domestic and international markets. Recently, 773,000 transistors it made using production equipment imported under the free trade port's zero-tariff policy were exported, with a total value of 1.85 million yuan ($258,000).

Technicians check equipment at Hainan Huaxin Intelligent Manufacturing in Haikou. [Photo/VCG]

Other companies are also scaling up. Hainan Huaxin Intelligent Manufacturing Co Ltd has built two advanced packaging production lines, while Hainan Hangxin Co Ltd has begun large-scale production of power modules and chip packaging and is testing products. The bonded remanufacturing project for storage products by Huirong Electronics (Hainan) Co Ltd has started operations in Yangpu, while Hainan Fengyu Xinlian Semiconductor Equipment has expanded into the repair of high-end semiconductor equipment.

An employee operates a production line at Hainan Hangxin High-Tech Industrial Group in Haikou. [Photo/VCG]

The industry is also moving into emerging applications. In Sanya, Hainan Shenxin Technology (also known as SengsingX) has developed a 128-channel neural signal acquisition and stimulation chip for brain-computer interfaces — representing a breakthrough in a high-end market that was previously dominated by overseas suppliers.

Overall, with its growing industrial base and free trade port advantages, Hainan is positioning itself as a link between China's semiconductor capabilities and overseas markets, particularly in Southeast Asia.

Its emerging strengths in chip design, advanced packaging and testing, repairs and remanufacturing, as well as high-value applications, are giving the province's semiconductors industry an increasingly international outlook.