Global chip sales from Chinese companies are on the rise, largely due to increasing US-China tensions and a nationwide effort to advance China’s chip sector, including government subsidies, procurement preferences, and other preferential policies.
Just five years ago, China’s semiconductor device sales were $13 billion, accounting for only 3.8% of global chip sales. In 2020, however, the Chinese semiconductor industry registered an unprecedented annual growth rate of 30.6% to reach $39.8 billion in total annual sales, according to a Semiconductors Industries Association (SIA) analysis.
A separate SIA report last month had endorsed the World Semiconductors Trade Statistics global sales forecast, which projects the industry’s worldwide sales will be $553.0 billion in 2021, a 25.6% increase from the 2020 sales total of $440.4 billion. In 2022, the global market is projected to post moderate growth of 8.8% to reach $601.5 billion in annual sales.
The jump in growth helped China capture 9% of the global semiconductor market in 2020, surpassing Taiwan for two consecutive years and closely following Japan and the EU, which took 10% of the market share each. Sales data for 2021 are not yet available.
If China’s semiconductor development continues its strong momentum – maintaining 30% CAGR over the next three years – and assuming growth rates of industries in other countries stay the same, the Chinese semiconductor industry could generate $116 billion in annual revenue by 2024, capturing upwards of 17.4% of global market share. This would place China behind only the United States and South Korea in global market share.
Equally startling is the number of new firms in China rushing into the semiconductor industry. Nearly 15,000 Chinese firms registered as semiconductor enterprises in 2020. A large number of these new firms are fabless start-ups specializing in GPU, EDA, FPGA, AI computing, and other higher-end chip design. Many of these firms are developing advanced chips, designing and taping out devices on bleeding-edge process nodes.
Sales of Chinese high-end logic devices are also accelerating, with the combined revenue of China’s CPU, GPU, and FPGA sectors growing at an annual rate of 128% to nearly $1 billion in revenue in 2020, up from a meager $60 million in 2015 [5].
Across all four subsegments of the Chinese semiconductor supply chain – fabless, IDM, foundry, and OSAT – Chinese firms recorded rapid increases in revenue last year, representing annual growth rates of 36%, 23%, 32%, 23%, respectively, based on an SIA analysis.
Leading Chinese semiconductor firms are on track to expand domestically, and even globally, in several submarkets.
(Except for the headline, this story has not been edited by The Technology Express staff and is published from a syndicated feed)
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