China is gaining chip production market share rapidly, says SIA
The SIA describes it as a “whole-of-nation” effort and states that in 2020 alone 15,000 companies registered as semiconductor enterprises in 2020. However, the reference the SIA cited – a Chinese website called IT – claimed that 22,800 companies registered as chip companies in 2020 an increase of 195 percent from 7,715 companies that registered in 2019.
IT states that there were 66,500 chip-related companies registered in China at the end of 2020 with one third having registered in the last year.
Global semiconductor market share, by major country, region. Source: SIA.
In 2016 China’s semiconductor device sales were $13 billion, accounting for 3.8 percent of global chip sales, the SIA said. In 2020, the Chinese semiconductor industry registered an annual growth rate of 30.6 percent to reach $39.8 billion in total annual sales. This allowed China to capture 9 percent of the global semiconductor market in 2020, surpassing Taiwan and close behind Japan and the European union, which each took 10 percent of market share.
The SIA then plots forward assuming China maintains a 30 percent compound annual growth rate and that other countries and regions maintain there growth rates and predicts that in 2024 China will generate $116 billion in annual revenue and capture 17.4 percent of a global market worth US$667 billion.
This would place China behind only the United States and South Korea in global market share.
There is a strong increase in Chinese semiconductor activity over the last two years and many of these are fabless start-ups specializing in GPU, EDA, FPGA, AI computing, and other higher-end chip design. The combined revenue of China’s CPU, GPU, and FPGA sectors is growing at an annual rate of 128 percent, according to the SIA and was worth nearly $1 billion in 2020 up from $60 million in 2015.
Next: Four subsegments
SIA claims that cross all four subsegments of the Chinese semiconductor supply chain – fabless, IDM, foundry, and OSAT – Chinese firms recorded increases in revenue in 2020, representing annual growth rates of 36, 23, 32 and 23 percent, respectively.
China wafer fab projects announced in 2021. Source: SIA.
China announced 28 fab construction projects in 2021 with an estimated budget of $26 billion.
Due to the inclusion of Huawei and SMIC on the U.S. government’s entity list, the Chinese semiconductor industry has largely suspended advanced logic node manufacturing development and redirected capital to mature fabrication technology. However, it has added nearly 500k wafer starts per month in capacity in the 14 months to November 2021.
In DRAM and 3D-NAND Chinese companies are producing 19nm DDR4 DRAM devices, and 64-layer 3D NAND Flash chips and have started producing 128-layer products. Although not quite at the leading-edge the Chinese memory sector is expected to experience 40 to 50 percent annual growth and become highly competitive over the next five years, the SIA said.
China is already a leader in outsourced assembly, packaging, and testing (OSAT), with its top three OSAT players collectively holding more than 35 percent global market share.
The SIA concludes that China’s rapid growth in semiconductor chip sales will continue due to the commitment of central government and the policy of support for “decoupling” from the West.
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