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China’s IC Industry Revenue On Track to Top $250 Billion In 2025

China’s semiconductor sector is rapidly becoming one of the largest in the world.

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In the short span of a decade, China’s semiconductor sector has exploded to become one of the largest in the world and match the region’s prominence as the biggest consumer of chips. From 2015 to 2020 alone, revenue of China’s integrated circuit (IC) industry – consisting of IC design, IC manufacturing, and packaging and test – expanded at a rapid clip of 20% CAGR (RMB) to $128 billion, according to the Chinese Semiconductor Industry Association (CSIA).

That total will be dwarfed after doubling to $257 billion by 2025, SEMI highlighted in its China IC Ecosystem Report.


*In RMB, CAGR from 2015 to 2020 is 20%.

China IC design: From consumer to crypto mining to AI

IC design, the largest segment of China’s IC industry, has evolved from a focus on low-margin consumer applications to encompass advanced communication and computing semiconductors across growth markets in automotive, crypto mining, the Internet of Things (IoT), and artificial intelligence (AI). IC design start-ups continue to form in China every year to develop new products. The number of Chinese system companies and electronics OEMs invest in designing their own chips to differentiate their products, carve out a competitive niche, and ensure their supply chain’s security and stability are on the rise.

IC manufacturing: China accelerates fab capacity and equipment investments

China has been aggressively building new fab capacity since its introduction of the China Integrated Circuit Investment Fund in 2014. The investments are paying off, with China’s wafer fab capacity share surging from 9% in 2010 to 17% in 2020. Driven by strong end-user demand and various national and provincial funds, China is expected to continue to lead the world in new fab projects and capacity growth. The SEMI China IC Ecosystem Report forecasts China will post a 13% capacity CAGR from 2020 to 2023, with the highest growth stemming from the analog, discrete/power, and foundry segments.

China’s investment in capital equipment is also growing. The region’s semiconductor equipment market reached $13 billion in 2018 and surged to $18 billion in 2020 to become the world’s largest for the first time. While SEMI expects China to top $20 billion in chip equipment investments in 2021, those outlays may moderate over the next few years due to regulatory restrictions on access to leading-edge tools. Even so, China will remain one of the top three capital equipment markets in the forecast.

Outlook and challenges

Although China historically struggled to grow its chip industry, domestic manufacturers have entered a new era of vigorous growth powered by a heavily funded state agenda, a strong domestic market, and the region’s own hyperscale platform companies, putting it in a strong position to compete globally for both semiconductor and AI market share.

And while China and the U.S. have recently become heated rivals in the race for technology and semiconductor leadership, the rising pressure has only hardened China’s resolve to develop its semiconductor industry and build a secure, reliable semiconductor supply chain.

The SEMI China IC Ecosystem Report, 2021 Edition provides an in-depth analysis of China’s wide-ranging IC ecosystem, including China’s IC design, IC manufacturing, packaging and test, capital equipment, and semiconductor materials market and industries.



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