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IC Insights: there will be no significant progress in chip localization in China in the next 10 years

Published :5/28/2020 2:09:13 AM

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In 2019, mainland China accounted for 15.7 percent of its nearly $125 billion IC market, up from 15.1 percent in 2014, according to the latest report from IC Insights.As the chart below shows, IC Insights predicts that this share will grow by 5.0 percentage points in 2024 to 20.7 percent (an average of one percentage point per year).


There is still a big gap between China's IC market and China's local IC manufacturing industry.IC Insights has repeatedly pointed out that although China has been the world's largest consumer market for integrated circuits since 2005, this does not mean that local IC production has grown significantly since then, nor has it since then.

Of the $19.5 billion worth of chips made in China last year, companies based in mainland China accounted for $7.6 billion in IC production, just 6.1 percent of the $124.6 billion IC market in mainland China.Taiwan semiconductor manufacturing co., SK hynix, samsung, Intel corp. and other Taiwanese and foreign companies with IC fabs in China have rounded up the rest.

IC Insights estimates that of the $7.6 billion in IC made by mainland Chinese companies, about $1.8 billion comes from IDM and $5.8 billion comes from contract manufacturers such as smic.

If IC manufacturing in mainland China increases to us $43 billion by 2024, as IC Insights predicts, then China's IC production will still account for only 8.5% of the us $507.5 billion forecast for the global IC market in 2024.Even after a substantial increase in IC sales from some mainland Chinese OEM factories, the mainland's IC production may still account for only about 10% of the global IC market by 2024


IC Insights predicts that IC manufacturing in mainland China will achieve a strong compound annual growth rate of 17 percent between 2019 and 2024. However, it should be noted that IC production in mainland China was only $19.5 billion last year, starting from a relatively small base.