On the Efficiency of China’s Semiconductor Industry Based on the Meta-frontier DEA

Due to the Sino US trade war in recent years, the semiconductor industry in mainland China has faced strong international competition. The industry has been taking actively strategic transformation and upgrading technical level and the government policy has also greatly supported and assisted. Since there are three categories in the industry-upstream, middle and downstream, their technical levels and capital investment are also different, so the main supporting direction of government should be focused to avoid improper resource allocation. In this paper, the concept of meta-frontier DEA will be used to calculate the technology gap ratio (TGR) of sub-industries to understand the efficiency differences between the three ones for avoiding the traditional efficiency evaluation method which can only consider the same technical level. Finally, a forward better policy direction based on this study is offered.