SIA: China’s Share of Global Chip Sales Nearing Level of Europe and Japan

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The Semiconductor Industry Association (SIA) in the United States released a report on Monday saying that the global chip sales of Chinese mainland companies are increasing, which is mainly due to various tensions between China and the United States, and the former’s efforts to promote the development of its chip industry, including by government subsidies, procurement incentives and other preferential policies.

SIA’s analysis further shows that in 2020, China’s market share in the global fabless semiconductor field was as high as 16%, up from 10% in 2015.

Just five years ago, China’s semiconductor device sales were $13 billion, accounting for only 3.8% of global chip sales. However, according to SIA analysis, in 2020, China’s semiconductor industry achieved an unprecedented annual growth rate of 30.6%, with annual total sales reaching $39.8 billion. The jump in growth helped China occupy 9% of the global semiconductor market in 2020, followed by Japan and the European Union, which each have a 10% market share. Sales data for 2021 are not yet available.

If semiconductor development in China continues to maintain strong momentum – that is, to maintain a compound annual growth rate of 30% in the next three years, and assuming that the industrial growth rate of other countries and regions remains unchanged – by 2024, the annual revenue of the semiconductor industry in Chinese mainland may reach $116 billion, accounting for more than 17.4% of the global market share. This will make China’s share of the global market second only to the US and South Korea.

The number of new companies pouring into the semiconductor industry is also impressive. In 2020, nearly 15,000 Chinese firms registered as semiconductor enterprises. A large number of these new companies are fabless startups specializing in GPU, EDA, FPGA, AI computing and other high-end chip design. Many of these companies are developing advanced chips, designing and tape-out equipment on bleeding-edge process nodes.

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Sales of high-end logic devices in Chinese mainland are also accelerating. The total revenue of CPU, GPU and FPGA sectors in China is growing at an annual rate of 128%, and the revenue will be close to $1 billion by 2020, up from $60 million in 2015.

Across all four subsegments of the Chinese semiconductor supply chain – fabless, IDM, foundry, and OSAT – Chinese firms recorded rapid increases in revenue last year, representing annual growth rates of 36%, 23%, 32%, 23%, respectively, based on an SIA analysis. Leading Chinese semiconductor firms are on track to expand domestically, and even globally, in several submarkets.

All indications are that China’s rapid growth in semiconductor chip sales is likely to continue. While China still has a long way to go to catch up with existing industry leaders, especially in terms of advanced node foundry production, equipment and materials, the gap is expected to narrow over the next decade.