China reports strong growth in semiconductor industry despite US sanctions

Since 2019, some of the major semiconductor industry players have been listed on the entity list by the U.S. government, but China recorded double-digit growth in revenues for all semiconductor subsectors in 2020, providing global market share. I pushed up and challenged. According to some recent reports, Taiwan and the United States.

If strong growth continues, China’s semiconductor industry will grow rapidly in the next decade, becoming the world champion in semiconductor manufacturing by 2030, 24%, as previously predicted by the Semiconductor Industry Association (SIA). Gain global market share.

According to the SIA blog, China’s semiconductor industry grew 30.6% in 2020 with total sales of $ 39.8 billion. This is fabless, IDM, foundry, and OSAT sector respectively.

China recorded a 9% share of the global semiconductor market in 2020, surpassing Taiwan for the second consecutive year. The global market shares of the semiconductor industries of both major powers are both 10%, and it is highly likely that they will soon overtake Japan and Europe.

China’s fabless semiconductor subsegment is third only to the United States and Taiwan, accounting for 16% of the world market share and up from 10% in 2015, despite severe chip export controls. did.

According to IC Insights and SIA, China accounted for 26% of the world’s total wafer capacity growth, with the top three semiconductor assembly and testing (OSAT) companies gaining more than 35% of the global market share.

China has already announced US $ 26 billion in new planning funding for 28 additional fab construction projects in 2021 and is primarily focused on mature processing nodes.

Backed by government subsidies and favorable tax incentives, private investors are pouring money into China’s semiconductor industry. Some consumer electronics and consumer electronics OEMs, such as Xiaomi and Alibaba, design their chips in-house and have them manufactured by local foundry manufacturers such as SMIC and Hua Hong. This is in line with Beijing’s call for IC sovereignty and self-sufficiency.

According to SIA, about 15,000 semiconductor startups will be founded in 2020 alone, many of which are IC design companies specializing in GPU, EDA, FPGA, AI computing and other high-end chip designs. According to data from China’s online business information provider Tianyancha, according to Global Times, China currently operates more than 350,000 companies in the semiconductor sector, 80% of which have been registered within the last five years, 30 % Has been registered within the last 12 months.

In addition to significant funding from China’s central, state and local governments, Chinese start-ups also receive financial support from local companies such as Huawei. Huawei is actively investing in 56 Chinese semiconductor supply chain companies through its “Hubble Technology Investment”. According to the fund to foster a unique semi-con ecosystem. ” The Wall Street Journal..

US sanctions on SMIC and Huawei slowed China’s progress, but international affairs under the Belfer Science Center and Harvard Kennedy School in December 2021.

Assuming that China maintains a compound annual growth rate (CAGR) of 30% over the next three years and the growth rates of other countries remain the same, China’s semiconductor industry will have 17.4% of its global market share by 2024. Has the potential to win and spawn the United States. SIA forecasts revenue of $ 116 billion. If that happens, China will become the third largest semiconductor power in market share after the United States and South Korea.

China has also tripled its semiconductor consumption over the last decade. According to a recent report by Harvard Kennedy School, China’s market share in semiconductor consumption increased from less than 20% in 2000 to 60% in 2019.

China’s rapid rise to challenge US dominance is less threatening in areas such as semiconductor manufacturing equipment and electronic design automation (EDA) tools where US companies are enjoying the benefits of oligopoly.

However, Kenneda School reports that the United States has long-term vulnerabilities, including debt-based R & D budget constraints, growing shortages of semiconductor talent, and increased reliance on Chinese companies as a major source of income. I have. China reports strong growth in semiconductor industry despite US sanctions

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