According to a report drawn by Bloomberg's analysis of official trade data, in 2020, mainland China purchased nearly US$32 billion of semiconductor production equipment from Japan, South Korea, Taiwan and other places for chip production, an increase of 20% compared to 2019.
In addition to changes in the market demand for chips, the reasons behind this growth are also factors such as US sanctions on technology companies such as Huawei and SMIC.
The sanctions imposed by the United States have forced Huawei to stockpile chips in order to cope with the situation where it may be difficult to meet the demand for chips after the supply break. The same reason also forced SMIC to make a big move to purchase chip production equipment. Even if EUV lithography machines are not available, other production equipment that may be restricted after the sanctions, SMIC has also taken an active role in hoarding chips like Huawei. reserve.
In this context, in 2020, China’s chip imports surged by about 14%, and the import value climbed to nearly 380 billion U.S. dollars, which is more than 2.4 trillion yuan converted into RMB, which will roughly account for mainland China’s annual imports in 2020. 18% of the total. According to the report of the International Semiconductor Industry Association (SEMI) in December 2020, China has become the largest market for semiconductor equipment in 2020.
And this nearly 380 billion US dollars of chips, according to statistics, among the seven major sources, not only developed economies such as Japan, South Korea, Taiwan, and the United States, but also emerging and developing economies such as Malaysia, the Philippines, and Vietnam.
Data source: General Administration of Customs of China
According to Wang Dan, a technical analyst at Gavekal Dragonomics, "In the short term, China will rely on imports to improve its chip manufacturing level... China does not yet have the capacity to produce the chip manufacturing equipment required for advanced processes, but China is investing heavily, and success requires more than ten. Years of hard work."
These are the conditions of China's imported chips/chip production equipment. Let's look at the MCU industry, which is closely related to the Internet of Things industry.
According to the McClean integrated circuit mid-year report released by the well-known analysis organization ICinsights in August 2020, it is predicted that in 2020, MCU sales will shrink by 8%, the largest decline among all types of IC devices.
ICInsights data shows that in 2018, MCU global revenue set an unprecedented record-17.6 billion U.S. dollars, and then fell by 7% in 2019. It is expected that the decline in 2020 will further expand to 8%, down to 14.9 billion U.S. dollars.
Although MCU sales have declined for two consecutive years, ICInsights predicts that in 2021, MCU sales will resume growth, and sales will increase by 5% to reach 15.7 billion U.S. dollars, continue to increase by 8% in 2022, and increase by 11% in 2023, reaching 18.8 billion. The US dollar exceeded 2018 and reached a record high.
In terms of MCU shipments, it is expected that it will also decline by 8% in 2020 to 23.5 billion units. Similarly, it is predicted that in 2021, sales will rebound by 6% to 24.9 billion units, continue to increase by 8% in 2022, and increase by another 10% in 2023, reaching 29.6 billion units.
The major impacts are the automotive market and the industrial market. ICInsights predicts that in 2020, the sales of the automotive market will be 6 billion US dollars, accounting for about 40%, and the industrial MCU revenue will account for 29%, and the sales will be about 4.3 billion US dollars.