The Chinese chip manufacturing figure is down from a previously given estimate of $47 billion (see IC Insights, SEMI far apart on significance of Chinese IC production).
Tariffs and trade issues now starting to disrupt electronics companies are forcing China to try and accelerate its plans for chip manufacturing and self-sufficiency but it could take decades of concerted action to address China's chip deficit, the market researcher said.
China IC market versus China IC production over time. Source: IC Insights.
IC Insights has now published a bulletin that argues that China's resolve to grow its domestic IC business and reduce dependence on the US is more optimistic than realistic. The argument has been raised before (see IC Insights, SEMI far apart on significance of Chinese IC production).
But IC Insights has now put some anecdotal flesh on the bones of the argument. For a start the market analyst points out that China has already spent a considerable amount of money bringing up memory fabs it has yet to make any significant in-roads in the market.
China’s first indigenous DRAM supplier, Changxin Memory Technologies (CXMT), is due to sample its first DRAM products by the end of this year, IC Insights observes. It's annual capital expenditure budget of $1.5 billion is insignificant compared with the $46.2 billion combined annual spend of Micron, Samsung and SK Hynix. DRAM and flash memory accounted for 41 percent of China’s $155.1 billion IC market last year, IC Insights estimates.
"IC Insights remains extremely sceptical whether the country can develop a competitive indigenous memory industry even over the next 10 years and come anywhere close to meeting its memory IC needs," the analyst said in the Bulletin.
Next: The second plank