IC Insights, SEMI far apart on significance of Chinese IC production

February 11, 2019 //By Peter Clarke
IC Insights, SEMI far apart on significance of Chinese IC production
Market research form IC Insights and industry body SEMI have different views about how significant the value of Chinese chip production will be in 2020 and 2023.

Last year SEMI said it sees China achieving 20 percent of global chip manufacturing in 2020 (see China set to make a fifth of world's chips in 2020). In a recent statement from IC Insights the market researcher said it thinks China-based fabs will only make 8.2 percent of the global IC manufacturing by value in 2023.

Both firms would probably agree that the production of ICs in China is growing faster than the Chinese market. This partly a result of Chinese investment and in-line with the Chinese government's policy of reducing Chinese dependency on overseas chip makers, but is likely to fall short of government goals, according to IC Insights.

IC Insights' forecasts that China's IC production will grow at a compound annual growth rate of 15 percent over the six years 2018 to 2023 while the Chinese chip market will grow with a CAGR of 8 percent over the same period. As a result China's IC production value of $23.8 billion in 2018 represented 15.3 percent of its $155 billion IC market and IC Insights forecasts that this share will increase to 20.5 percent in 2023.

China IC market versus China IC production over time. Source: IC Insights.

China is ploughing billions of dollars into supporting home-grown companies as well as encouraging semiconductor leaders to build fabs and train Chinese chip workers for local production so it is likely the strategy will have some success. However, IC Insights believes that China’s current strategy will fall short of the levels China's government has targeted with its "Made in China 2025" plan, which were 40 percent self-sufficiency by 2020 and 70 percent by 2025.

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