Knowledge Center
Knowledge Center




China aims to quickly build out its chip design and manufacturing capabilities. China has been striving for self-sufficiency in the chip manufacturing for over a decade. While China has been one of the world’s largest consumers of semiconductors, the majority of those chips are imported from foreign suppliers. China imported about 90% of its chips in 2012.

In an effort to close that trade gap, the Chinese government embarked on a number of efforts in memory, logic, IC design and packaging, including the construction of a number of domestic fabs. The Chinese government unveiled a plan in 2014, dubbed the “National Guideline for Development of the IC Industry” to accelerate China’s efforts in 14nm finFETs, advanced packaging, and memory. As part of the plan, China launched a $19.3 billion fund, which would be used to invest in its domestic IC firms. Local municipalities and private equity firms also pledged to spend $100 billion across China’s IC sector.

In 2015, when China’s domestic chip production was at 10% of chips used by its OEMs, China announced its “Made in China 2025” program to have 40% of the chips it consumed be made in China by 2020 and 70% by 2025. The goal was to upgrade and increase the domestic content of components in 10 key areas — information technology; robotics; aerospace; shipping; railways; energy systems and vehicles; power equipment; materials; medicine; and agricultural machinery.

So far, China has achieved some of its self-sufficiency goals but some setbacks have come from U.S. trade restrictions. Others setbacks have come from the chip supply chain issues that grew out of the COVID-19 pandemic. All told, China will invest $150 billion from 2014 through 2030 in semiconductors, according to the Semiconductor Industry Association (SIA).

From 2015 to 2020, China’s IC industry revenue expanded at a 20% CAGR to $128 billion. By 2025, this total is forecast to reach $257 billion, according to SEMI. China captured 9% of the global semiconductor market in 2020, according to SIA.

“China is projected to increase its global share of 300mm front-end fab capacity from 19% in 2021 to 23% in 2025, reaching 2.3 million wpm, a rise driven by factors including growing government investments in the domestic chip industry,” said SEMI in October 2022. “With the growth, China is nearing global leader Korea in 300mm fab capacity and expected to overtake Taiwan, now in second place, next year.”

Find the Startup Funding in China eBook here.
Find the Global Startup Funding ebook here.